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

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

+449 added−385 removedSource: 10-K (2023-12-22) vs 10-K (2022-12-29)

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

449 paragraphs added · 385 removed · 299 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

90 edited+15 added−9 removed186 unchanged
Biggest changeSelexis — Humira (ONS-3010), Avastin (ONS-5010 and ONS-1045) and Herceptin (ONS-1050) In October 2011, we entered into a research license agreement with Selexis, whereby we acquired a non-exclusive license to conduct research internally or in collaboration with third parties to develop recombinant proteins from cell lines created in mammalian cells using the Selexis expression technology, or the Selexis Technology.
Biggest changeWe used approximately $0.9 million of the proceeds from the May 2020 private placement to Syntone to fund our initial capital contribution to the PRC joint venture, and are committed to make additional capital contributions to the PRC joint venture up to approximately $2.1 million which will be made within four years after the establishment date (April 2021) upon approval of the development plan contemplated in the license agreement or on such other terms as may be determined within such four-year period. 8 Table of Contents Selexis — Humira (ONS-3010), Avastin (ONS-5010 and ONS-1045) and Herceptin (ONS-1050) In October 2011, we entered into a research license agreement with Selexis, whereby we acquired a non-exclusive license to conduct research internally or in collaboration with third parties to develop recombinant proteins from cell lines created in mammalian cells using the Selexis expression technology, or the Selexis Technology.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices, or GLP, regulation; ● submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced; ● performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; ● preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; ● satisfactory completion of an FDA Advisory Committee review, if applicable; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCP; and 13 Table of Contents ● FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following: ● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices, or GLP, regulation; ● submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made; ● approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced; ● performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose; ● preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials; ● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; ● satisfactory completion of an FDA Advisory Committee review, if applicable; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices, or GCP; and 14 Table of Contents ● FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.
NORSE TWO is our pivotal Phase 3 clinical trial comparing ONS-5010 to ranibizumab (LUCENTIS) that reported highly statistically significant topline results in August 2021. NORSE THREE is an open-label safety study conducted to ensure the adequate number of safety exposures to ONS-5010 were available for the initial ONS-5010 BLA submission with the FDA.
NORSE TWO is our pivotal Phase 3 clinical trial comparing ONS-5010 to ranibizumab (LUCENTIS) that reported highly statistically significant topline results in August 2021. NORSE THREE is an open-label safety study conducted to ensure the adequate number of safety exposures to ONS-5010 were available for the ONS-5010 BLA submission with the FDA.
For these reasons, the retina community and payors have shown interest in the development of an ophthalmic formulation of bevacizumab that could be an on-label alternative to repackaged bevacizumab from compounding pharmacists. Of 152 U.S. retina physicians surveyed in 2019, nearly 84% indicated they had an interest or high interest in an approved ophthalmic formulation of bevacizumab.
For these reasons, the retina community and payors have shown interest in the development of an ophthalmic formulation of bevacizumab that could be an on-label alternative to repackaged bevacizumab from compounding pharmacists. Of 152 U.S. and European retina physicians surveyed in 2019, nearly 84% indicated they had an interest or high interest in an approved ophthalmic formulation of bevacizumab.
However, although multiple branded drugs have been approved for these indications (e.g., LUCENTIS, EYLEA, BEOVU, SUSVIMO and VABYSMO), they are very expensive. The initial recently approved biosimilar versions of LUCENTIS are also expensive, although they are available at a discount to the reference drug.
However, although multiple branded drugs have been approved for these indications (e.g., LUCENTIS, EYLEA, BEOVU, SUSVIMO and VABYSMO), they are very expensive. The recently approved biosimilar versions of LUCENTIS are also expensive, although they are available at a discount to the reference drug.
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to 17 Table of Contents defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to 18 Table of Contents defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The FDA may require one or more Phase 4 post-market trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies. 15 Table of Contents Post-Approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
The FDA may require one or more Phase 4 post-market trials and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization and may limit further marketing of the product based on the results of these post-marketing studies. 16 Table of Contents Post-Approval Requirements Any products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Doctors who wish to treat their retinal patients with a less expensive anti-VEGF drug, with minimal reimbursement hurdles, often use off-label bevacizumab. However, because there is no FDA-approved ophthalmic formulation of bevacizumab, doctors must use repackaged bevacizumab (Avastin) provided by compounding pharmacists that is not required to meet the standards for ophthalmic use necessary for an approved product.
Doctors who wish to treat their retinal patients with a less expensive anti-VEGF drug, with minimal reimbursement hurdles, often use off-label bevacizumab. However, because there is no FDA or EMA-approved ophthalmic formulation of bevacizumab, doctors must use repackaged bevacizumab (Avastin) provided by compounding pharmacists that is not required to meet the standards for ophthalmic use necessary for an approved product.
These so-called Phase 4 studies may be made a condition to approval of the BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the 14 Table of Contents product in commercial quantities in accordance with cGMP requirements.
These so-called Phase 4 studies may be made a condition to approval of the BLA. Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the 15 Table of Contents product in commercial quantities in accordance with cGMP requirements.
Per the American Academy of Ophthalmology, retinal vein occlusions are the second most common retinal vascular disorder after diabetic retinopathy. There were an 3 Table of Contents estimated 0.3 million patients with BRVO in the United States, European countries and Japan alone in 2020 (Triangulation of Global Data, Market Scope and Investor Forecasts (2020)).
Per the American Academy of Ophthalmology, retinal vein occlusions are the second most common retinal vascular disorder after diabetic retinopathy. There were an estimated 0.3 million patients with BRVO in the United States, European countries and Japan alone in 2020 (Triangulation of Global Data, Market Scope and Investor Forecasts (2020)).
The initiation of our Phase 3 clinical program for ONS-5010 in fiscal 2019 triggered a CHF 65,000 (approximately $0.1 million) milestone payment to Selexis under the commercial license agreement, which we paid in November 2019. As of September 30, 2022, we have paid Selexis an aggregate of approximately $0.4 million under the commercial license agreements.
The initiation of our Phase 3 clinical program for ONS-5010 in fiscal 2019 triggered a CHF 65,000 (approximately $0.1 million) milestone payment to Selexis under the commercial license agreement, which we paid in November 2019. As of September 30, 2023, we have paid Selexis an aggregate of approximately $0.4 million under the commercial license agreements.
Our fifth PCT application was nationalized in August 2018 in Australia, Canada, 12 Table of Contents China, Europe, India, Japan, Mexico and the United States. If granted, patents issuing from these eight applications are expected to expire in 2037, absent any adjustments or extensions.
Our fifth PCT application was nationalized in August 2018 in Australia, Canada, China, Europe, 13 Table of Contents India, Japan, Mexico and the United States. If granted, patents issuing from these eight applications are expected to expire in 2037, absent any adjustments or extensions.
As of September 30, 2022, we have received an aggregate of $5.0 million of payments from IPCA under our various agreements, an aggregate of $3.0 million of payments from Liomont under our various agreements, an aggregate of $16.0 million of payments from Huahai under our various agreements, $10.0 million of which were pursuant to the joint participation agreement, and an aggregate of $5.0 million from BioLexis under our joint development and licensing agreement.
As of September 30, 2023, we have received an aggregate of $5.0 million of payments from IPCA under our various agreements, an aggregate of $3.0 million of payments from Liomont under our various agreements, an aggregate of $16.0 million of payments from Huahai under our various agreements, $10.0 million of which were pursuant to the joint participation agreement, and an aggregate of $5.0 million from BioLexis under our joint development and licensing agreement.
We re-submitted the BLA to the FDA for ONS-5010 on August 30, 2022, and in October 2022, we received confirmation from the FDA that our BLA has been accepted for filing with a goal date of August 29, 2023 for a review decision by the FDA.
We re-submitted the BLA to the FDA for ONS-5010 on August 30, 2022, and in October 2022, we received confirmation from the FDA that our BLA had been accepted for filing with a goal date of August 29, 2023 for a review decision by the FDA.
As noted above, our collaboration agreements with Huahai also includes a joint participation agreement, which provides for the co-funding of development of ONS-3010 in the United States, Canada, E.U., Japan, Australia and New Zealand and the proportionate sharing of the revenues from commercialization of ONS-3010 in the agreed countries, and also provides for the formation of a joint venture with Huahai to further develop and commercialize ONS-3010 with Huahai in the agreed countries, if so requested by Huahai.
As noted above, our collaboration agreements with Huahai also includes a joint participation agreement, which provides for the co-funding of development of ONS-3010 in the United States, Canada, E.U., Japan, Australia and New Zealand and the proportionate sharing of the revenues from commercialization of ONS-3010 in the agreed countries, and also 10 Table of Contents provides for the formation of a joint venture with Huahai to further develop and commercialize ONS-3010 with Huahai in the agreed countries, if so requested by Huahai.
We currently have collaboration and license agreements for smaller ex-U.S. markets and, collectively, such agreements have provided an aggregate of $29.0 million in payments as of September 30, 2022 for our most advanced biosimilar product candidates.
We currently have collaboration and license agreements for smaller ex-U.S. markets and, collectively, such agreements have provided an aggregate of $29.0 million in payments as of September 30, 2023 for our most advanced biosimilar product candidates.
Syntone – Private Placement and PRC Joint Venture In May 2020, we entered into a stock purchase agreement with Syntone Ventures LLC, or Syntone, pursuant to which we sold and issued, in a private placement in June 2020, 16,000,000 shares of our common stock at a purchase price of $1.00 7 Table of Contents per share, for aggregate gross proceeds of $16.0 million.
Syntone – Private Placement and PRC Joint Venture In May 2020, we entered into a stock purchase agreement with Syntone Ventures LLC, or Syntone, pursuant to which we sold and issued, in a private placement in June 2020, 16,000,000 shares of our common stock at a purchase price of $1.00 per share, for aggregate gross proceeds of $16.0 million.
To date, a number of biosimilars 16 Table of Contents have been licensed under the BPCIA, and numerous biosimilars have been approved in Europe. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.
To date, a number of biosimilars 17 Table of Contents have been licensed under the BPCIA, and numerous biosimilars have been approved in Europe. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.
Our business could be harmed if our current contract manufacturer is unable to manufacture our product candidates at the necessary quantity or quality levels.” and “Risk Factors—We currently engage single source suppliers for clinical trial services and multiple source suppliers for future drug substance manufacturing, fill-finish manufacturing and product testing of ONS-5010.
Our business could be harmed if our current contract manufacturer is unable to manufacture our product candidates at the necessary quantity or quality levels, We currently engage single source suppliers for clinical trial services and multiple source suppliers for future drug substance manufacturing, fill-finish manufacturing and product testing of ONS-5010.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response letter.
Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a CRL.
If approved, we believe ONS-5010 has potential to mitigate risks associated with off-label repackaging of bevacizumab including, but not limited to, variability in potency, safety and sterility adverse events and syringe-related adverse events. DME is caused by a complication of diabetes called diabetic retinopathy.
If approved, we believe ONS-5010 has potential to mitigate risks associated with off-label repackaging of bevacizumab including, but not limited to, variability in potency, safety and sterility adverse events and syringe-related 3 Table of Contents adverse events. DME is caused by a complication of diabetes called diabetic retinopathy.
NORSE THREE is an open-label safety study we conducted to ensure the adequate number of safety exposures to ONS-5010 were available for the initial ONS-5010 BLA submission with the FDA. In March 2021, we reported that the results from NORSE THREE showed a positive safety profile for ONS-5010.
NORSE THREE is an open-label safety study we conducted to ensure the adequate 1 Table of Contents number of safety exposures to ONS-5010 were available for the initial ONS-5010 BLA submission with the FDA. In March 2021, we reported that the results from NORSE THREE showed a positive safety profile for ONS-5010.
It is a three month study designed to compare the safety of ophthalmic bevacizumab in vials versus pre-filled syringes in subjects diagnosed with a retinal condition that would benefit from treatment with intravitreal injection of bevacizumab, including exudative AMD, DME, or BRVO.
It is a three month study designed to compare the safety of ophthalmic bevacizumab in vials versus pre-filled 6 Table of Contents syringes in subjects diagnosed with a retinal condition that would benefit from treatment with intravitreal injection of bevacizumab, including exudative AMD, DME, or BRVO.
Our registration plans for wet AMD, the initial indication planned for ONS-5010, consists of three clinical trials which we refer to as NORSE ONE, NORSE TWO and NORSE THREE. All three clinical trials have been completed. We reported achieving the anticipated safety and efficacy and positive proof-of-concept topline results from NORSE ONE, a clinical experience study, in August 2020.
Our registration plan for wet AMD, the initial indication planned for ONS-5010, consisted of three clinical trials which we refer to as NORSE ONE, NORSE TWO and NORSE THREE. All three clinical trials have been completed. We reported achieving the anticipated safety and efficacy and positive proof-of-concept topline results from NORSE ONE, a clinical experience study, in August 2020.
If approved, we believe that LYTENAVA (bevacizumab-vikg) will be entitled to 12 years regulatory exclusivity granted in the United States against biosimilar competition, and up to 10 years in Europe. ​ 6 Table of Contents For many years, anti-VEGF therapy has been the standard of care for many ophthalmic diseases, including wet AMD, DME and BRVO.
If approved, we believe that LYTENAVA (bevacizumab-vikg) will be entitled to 12 years of regulatory exclusivity granted in the United States against biosimilar competition, and up to 10 years of market exclusivity in Europe. ​ For many years, anti-VEGF therapy has been the standard of care for many ophthalmic diseases, including wet AMD, DME and BRVO.
In November 2021, we began enrolling patients in our NORSE SEVEN clinical trial. The study compares the safety of ophthalmic bevacizumab in vials versus pre-filled syringes. This study supports a planned supplemental BLA, or sBLA, we expect to submit subsequent to our current BLA receiving approval for wet AMD.
In November 2021, we began enrolling patients in our NORSE SEVEN clinical trial. The study compares the safety of ophthalmic bevacizumab in vials versus pre-filled syringes. This study supports a planned supplemental BLA, or sBLA, we expect to submit subsequent to the anticipated FDA approval for wet AMD.
A Complete Response letter will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the Complete Response letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
A CRL will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling.
In September 2022, we entered into a strategic relationship with AmerisourceBergen in preparation for the anticipated commercial launch in the United States of ONS-5010 (LYTENAVA (bevacizumab-vikg)), if approved by the FDA, pursuant to which AmerisourceBergen would provide third-party logistics services and distribution, as well as medical information and pharmacovigilance services in the United States.
In September 2022, we entered into a strategic relationship with Cencora, Inc., formerly AmerisourceBergen Corporation, or Cencora, in preparation for the anticipated commercial launch in the United States of ONS-5010 (LYTENAVA (bevacizumab-vikg)), if approved by the FDA, pursuant to which Cencora would provide third-party logistics services and distribution, as well as medical information and pharmacovigilance services in the United States.
To date, these agreements have collectively provided an aggregate of $29.0 million in payments as of September 30, 2022.
To date, these agreements have collectively provided an aggregate of $29.0 million in payments as of September 30, 2023.
In addition to the other treatments used in patients with wet AMD, there are various other companies with product candidates in Phase 1, 2 and 3 clinical trials for the treatment of wet AMD.
In addition to the other treatments used in patients with wet AMD, there are various other companies with product candidates in Phase 1, 2 and 3 clinical trials, or FDA review, for the treatment of wet AMD.
Despite clinicians’ widespread acceptance and use of bevacizumab to treat ophthalmic diseases such as wet AMD, DME and BRVO, no manufacturer has previously sought approval of bevacizumab for these diseases from the FDA.
Despite clinicians’ widespread acceptance and use of bevacizumab to treat ophthalmic diseases such as wet AMD, DME and BRVO, no manufacturer has previously sought approval of bevacizumab for these diseases.
The loss of any of these suppliers, or any future single source suppliers, could harm our business.” Competition Competition in the area of pharmaceutical research and development is extensive and significantly depends upon multiple scientific and technological factors.
The loss of any of these suppliers, or any future single source suppliers, could harm our business. 11 Table of Contents Competition Competition in the area of pharmaceutical research and development is extensive and significantly depends upon multiple scientific and technological factors.
The standby agreement permits Liomont to assume the license under the applicable commercial agreement for Mexico upon specified triggering events involving our bankruptcy, insolvency or similar circumstances. Ex-U.S.
The standby agreement permits Liomont to assume the license under 9 Table of Contents the applicable commercial agreement for Mexico upon specified triggering events involving our bankruptcy, insolvency or similar circumstances. Ex-U.S.
To meet this retinal market need, we are developing ONS-5010 as an investigational ophthalmic formulation of bevacizumab. If approved, it will provide an FDA-approved and European Agency-approved, viable treatment option across the spectrum of anti-VEGF ophthalmic drugs that treat wet AMD, DME and BRVO.
To meet this retinal market need, we are developing ONS-5010 as an investigational ophthalmic formulation of bevacizumab. If approved, it will provide an FDA and EMA-approved, viable treatment option across the spectrum of 7 Table of Contents anti-VEGF ophthalmic drugs that treat wet AMD, DME and BRVO.
In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification.
As of November 1, 2022, we own three U.S. patents, fourteen foreign patents, four pending U.S. non-provisional applications, and 38 pending international applications that were nationalized from seven Patent Cooperation Treaty, or PCT, applications, which relate to formulations developed for ONS-3010 and ONS-5010/ONS-1045, methods of antibody purification, methods for purifying antibodies to separate isoforms, methods of use, methods of reducing high molecular weight species, and modulating afucosylated species as well as efficiently determining the amino acid sequence of antibodies.
As of October 1, 2023, we own three U.S. patents, sixteen foreign patents, one pending U.S. non-provisional application, and 18 pending international applications that were nationalized from seven Patent Cooperation Treaty, or PCT, applications, which relate to formulations developed for ONS-3010 and ONS-5010/ONS-1045, methods of antibody purification, methods for purifying antibodies to separate isoforms, methods of use, methods of reducing high molecular weight species, and modulating afucosylated species as well as efficiently determining the amino acid sequence of antibodies.
Our BLA registration program for ONS-5010 in wet AMD involved three clinical trials, which we refer to as NORSE ONE, NORSE TWO and NORSE THREE.
Our initial BLA submission for ONS-5010 in wet AMD involved three clinical trials, which we refer to as NORSE ONE, NORSE TWO and NORSE THREE.
This patent family begins to expire worldwide in 2022. The second patent family claims DNA compositions of matter useful for having 8 Table of Contents protein production increasing activity. This patent family is filed in the United States, Australia, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Russia, Singapore and South Africa.
This patent family began to expire worldwide in 2022. The second patent family claims DNA compositions of matter useful for having protein production increasing activity. This patent family is filed in the United States, Australia, Canada, China, Europe, Hong Kong, Israel, India, Japan, South Korea, Russia, Singapore and South Africa. This patent family will begin to expire worldwide in 2025.
The formal review process of the MAA by the EMA’s Committee for Medicinal Products for Human Use, or CHMP, is now set to begin with an estimated decision date expected in early 2024. ONS-5010 is our sole product candidate in active development.
The formal review process of the MAA by the EMA’s Committee for Medicinal Products for Human Use, or CHMP, is now well advanced with an estimated decision date expected in the first half of calendar 2024. ONS-5010 is our sole product candidate in active development.
Additionally, in a key secondary endpoint for the relevant patient population, the ONS-5010 patients achieved a mean improvement in BCVA of 8.3 letters. NORSE TWO 4 Table of Contents NORSE TWO was a masked, randomized, pivotal Phase 3 clinical trial that served as the second of our two required clinical trials evaluating ONS-5010 against ranibizumab for wet AMD.
Additionally, in a key secondary endpoint for the relevant patient population, the ONS-5010 patients achieved a mean improvement in BCVA of 8.3 letters. NORSE TWO NORSE TWO was a masked, randomized, pivotal Phase 3 clinical trial evaluating ONS-5010 against ranibizumab for wet AMD.
We are developing ONS-5010 as an ophthalmic formulation of bevacizumab for a BLA submission and not using the biosimilar drug development pathway. The following figure demonstrates the concentration-time profile of ONS- 2 Table of Contents 1045, U.S.-licensed Avastin, and E.U.-licensed Avastin as the mean. The vertical line at time zero denotes dosing.
We are developing ONS-5010 as an ophthalmic formulation of bevacizumab for a BLA submission and not using the biosimilar drug development pathway. The following figure demonstrates the concentration-time profile of ONS-1045, U.S.-licensed Avastin, and E.U.-licensed Avastin as the mean. The vertical line at time zero denotes dosing. These results suggest a high degree of similarity among the three products.
Our headquarters are located at 485 Route 1 South, Building F Suite 320, Iselin, New Jersey, 08830, and our telephone number at that location is (609) 619-3990. Our website address is www.outlooktherapeutics.com.
In November 2018, we changed our name to Outlook Therapeutics, Inc. Our headquarters are located at 485 Route 1 South, Building F Suite 320, Iselin, New Jersey, 08830, and our telephone number at that location is (609) 619-3990. Our website address is www.outlooktherapeutics.com.
Since the advent of anti-VEGF therapy, it has become the standard of care treatment option within the retina community, globally. Previously, we were developing ONS-5010 as a biosimilar of the cancer drug Avastin for use in oncology indications (ONS-1045).
VEGF is a protein that promotes the growth of new abnormal blood vessels. Anti-VEGF injection therapy blocks this growth. Since the advent of anti-VEGF therapy, it has become the standard of care treatment option within the retina community, globally. Previously, we were developing ONS-5010 as a biosimilar of the cancer drug Avastin for use in oncology indications (ONS-1045).
We have also executed a supply agreement for a best-in-class pre-filled ophthalmic syringe, which we believe will provide both ease-of-use for clinicians and add to ONS-5010’s safety profile over the current unapproved therapies that have caused problems 10 Table of Contents related to syringe malfunction and contamination.
We have also executed a supply agreement for a best-in-class pre-filled ophthalmic syringe, which we believe will provide both ease-of-use for clinicians and add to ONS-5010’s safety profile over the current unapproved therapies that have caused problems related to syringe malfunction and contamination. We will screen other contract manufacturers to meet our clinical, commercial and regulatory supply requirements as needed.
Our existing agreements to assist with research and development also included an upfront payment upon execution, and we have the ability to earn additional regular milestone payments, and the right to receive royalties (generally a mid-single digit to low-teens percentage rate) based on net sales in the agreed territory. 9 Table of Contents Generally, our agreements expire on a product-by-product basis on the date of the expiration of the royalty revenue term for all products in the territory.
Our existing agreements to assist with research and development also included an upfront payment upon execution, and we have the ability to earn additional regular milestone payments, and the right to receive royalties (generally a mid-single digit to low-teens percentage rate) based on net sales in the agreed territory.
Our goal is to launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet age-related macular degeneration, or wet AMD, diabetic macular edema, or DME, and branch retinal vein occlusion, or BRVO. Our plans also include potentially securing a strategic partner for the United Kingdom, Europe, Japan and other markets.
Our goal is to launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet age-related macular degeneration, or wet AMD, diabetic macular edema, or DME, and branch retinal vein occlusion, or BRVO.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions will take effect progressively starting in fiscal year 2023, although they may be subject to legal challenges.
The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. These provisions began to take effect progressively in fiscal year 2023.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to significant penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results. 18 Table of Contents Healthcare Reform In the United States and some foreign jurisdictions there have been, and we expect there will continue to be, several legislative and regulatory changes and proposed reforms of the healthcare system to contain costs, improve quality, and expand access to care.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to significant penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, disgorgement, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results.
In the coming years, additional legislative and regulatory changes could be made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidates.
It is unclear whether the models will be utilized in any health reform measures in the future. In the coming years, additional legislative and regulatory changes could be made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidates.
We have continued our approach to work closely with regulatory authorities to develop and conduct clinical trials that we believe will appropriately support approval of our product candidates if our clinical trials are successful.
We have continued our approach to work closely with regulatory authorities to develop and conduct clinical trials that we believe will appropriately support approval of our product candidates if our clinical trials are successful. ● Leveraging the expertise of large partners in the biopharma industry to support launch of ONS-5010, if approved.
ONS-5010 — Bevacizumab for Ophthalmic Use ONS-5010 is an investigational ophthalmic formulation of bevacizumab under development to be administered as an intravitreal injection for the treatment of wet AMD and other retinal diseases. We currently intend to commercialize in both vials and pre-filled syringes, if approved.
ONS-5010 — Bevacizumab for Ophthalmic Use ONS-5010 is an investigational ophthalmic formulation of bevacizumab under development to be administered as an intravitreal injection for the treatment of wet AMD and other retinal diseases.
Bevacizumab, BYOOVIZ, CIMERLI, EYLEA, BEOVU, LUCENTIS and VABYSMO are all administered via intravitreal injections directly into the eye. SUSVIMO is an implantable refillable port delivery system that delivers anti-VEGF for 4-6 months, upon which the device is refilled.
The initial recently approved biosimilar versions of LUCENTIS are also expensive, although they are available at a discount to the reference drug. Bevacizumab, BYOOVIZ, CIMERLI, EYLEA, BEOVU, LUCENTIS and VABYSMO are all administered via intravitreal injections directly into the eye. SUSVIMO is an implantable refillable port delivery system that delivers anti-VEGF for 4-6 months, upon which the device is refilled.
We will screen other contract manufacturers to meet our clinical, commercial and regulatory supply requirements as needed. For a discussion of risks related to our sources and availability of supplies, please see “Risk Factors—Previously, we manufactured bulk drug substance for preclinical and clinical supplies of our product candidates in our in-house facility.
For a discussion of risks related to our sources and availability of supplies, please see “Risk Factors.” Previously, we manufactured bulk drug substance for preclinical and clinical supplies of our product candidates in our in-house facility.
For example, in March 2010, President Obama signed into law the Affordable Care Act, which among other things, expanded coverage for the uninsured while at the same time containing overall healthcare costs, expanded and increased industry rebates for drugs covered under Medicaid programs, and made changes to the coverage requirements under the Medicare prescription drug benefit.
For example, in March 2010, President Obama signed into law the Affordable Care Act, which among other things, expanded coverage for the uninsured while at the same time containing overall healthcare costs, expanded and increased industry rebates for drugs covered under Medicaid programs, and made changes to the coverage requirements under the Medicare prescription drug benefit. 19 Table of Contents There have been judicial, Congressional and executive branch challenges to certain aspects of the Affordable Care Act, and we expect there will be additional challenges and amendments to the Affordable Care Act in the future.
For additional information on our clinical development status and product candidates, see “Our Product Candidate Portfolio— ONS-5010 — Bevacizumab for Ophthalmic Use—Clinical Development Status .” Currently, the cancer drug Avastin (bevacizumab) is used off-label for the treatment of wet AMD and other retinal diseases such as DME and BRVO even though Avastin has not been approved by regulatory authorities for use in these diseases.
Currently, the cancer drug Avastin (bevacizumab) is used off-label for the treatment of wet AMD and other retinal diseases such as DME and BRVO even though Avastin has not been approved by regulatory authorities for use in these diseases.
The royalty revenue term is 10 years from the date of first commercial sale and any renewal is subject to good faith negotiation. The license term for the agreed territory is perpetual.
Generally, our agreements expire on a product-by-product basis on the date of the expiration of the royalty revenue term for all products in the territory. The royalty revenue term is 10 years from the date of first commercial sale and any renewal is subject to good faith negotiation. The license term for the agreed territory is perpetual.
Both in the United States and globally, the high cost of treating retinal diseases such as wet AMD, DME and BRVO can result in patients receiving an insufficient number of treatments, or potentially no treatment at all. We believe in the value of having an affordable, FDA-approved option for patients that is safe, effective, and manufactured under proper guidance.
Both in the United States and globally, the high cost of treating retinal diseases such as wet AMD, DME and BRVO can result in patients receiving an insufficient number of treatments, or potentially no treatment at all.
Wet AMD is a significant disease worldwide, with an estimated prevalence of over 2.9 million patients diagnosed in the United States, European countries and Japan alone in 2020 (GlobalData).
Since the advent of anti-VEGF therapy, it has become the standard of care treatment option within the retina community, globally. Wet AMD is a significant disease worldwide, with an estimated prevalence of over 2.9 million patients diagnosed in the United States, European countries and Japan alone in 2020 (GlobalData).
Additionally, in October 2022 we submitted a Marketing Authorization Application, or MAA, for ONS-5010 with the European Medicines Agency, or the EMA. On December 22, 2022 our MAA was validated for review by the EMA.
Separately, in October 2022 we submitted a Marketing Authorization Application, or MAA, for ONS-5010 with the European Medicines Agency, or the EMA. On December 22, 2022, our MAA was validated for review by the EMA. The MAA was submitted as a ‘full-mixed marketing authorisation application’ based on Article 8.3 of Directive 2001/83/EC.
Wet AMD is a form of “late stage” AMD and is also called neovascular AMD. In wet AMD, abnormal blood vessels grow underneath the retina. These vessels can leak fluid and blood, which may lead to swelling and damage of the macula causing vision loss. With wet AMD, abnormally high levels of VEGF are secreted in the eyes.
These vessels can leak fluid and blood, which may lead to swelling and damage of the macula causing vision loss. With wet AMD, abnormally high levels of VEGF are secreted in the eyes. VEGF is a protein that promotes the growth of new abnormal blood vessels. Anti-VEGF injection therapy blocks this growth.
Under current legislation, the actual reduction in Medicare payments vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers.
In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several providers.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. 21 Table of Contents Corporate Information We initially incorporated in January 2010 in New Jersey as Oncobiologics, Inc., and in October 2015, we reincorporated in Delaware by merging with and into a Delaware corporation.
Programs currently in Phase 2 or Phase 3 clinical trials include, but are not limited to: ​ ● Ranibizumab biosimilar being developed by Bausch & Lomb and Xbrane Biopharma AB; ● Aflibercept biosimilars developed by Bioeq/Formycon (FB-203), Mylan (M-710) and Samsung/Biogen (SB-15) among others; ● Small molecule receptor tyrosine kinase inhibitor sunitinib malate (Graybug, GB-102); and ● Adeno-associated virus (AAV) carrying aflibercept coding sequence (Adverum, ADVM-022). ​ We believe that ONS-5010 has potential competitive advantages due to the familiarity of physicians in using off-label Avastin.
Programs currently in Phase 2 or Phase 3 clinical trials or FDA review include, but are not limited to: ​ ● Bevacizumab (HLX04-O) under development by Shanghai Henlius Biotech, Inc. and Essex Bio-Technology Ltd; ● Ranibizumab biosimilar developed by STADA Arzneimittel AG and Xbrane Biopharma AB; ● Aflibercept biosimilars developed by Bioeq/Formycon (FB-203), Mylan (M-710) and Samsung/Biogen (SB-15) among others; ● Small molecule receptor tyrosine kinase inhibitor sunitinib malate (Graybug, GB-102); and ● Adeno-associated virus (AAV) carrying aflibercept coding sequence (Adverum, ADVM-022).
These results suggest a high degree of similarity among the three products. Comparative Potency of ONS-1045 versus Avastin (U.S. and E.U.) Market Opportunity Age-related macular degeneration, or AMD, is a common eye condition and a leading cause of vision loss among people age 50 and older.
Comparative Potency of ONS-1045 versus Avastin (U.S. and E.U.) Market Opportunity Age-related macular degeneration, or AMD, is a common eye condition and a leading cause of vision loss among people age 50 and older. Wet AMD is a form of “late stage” AMD and is also called neovascular AMD. In wet AMD, abnormal blood vessels grow underneath the retina.
Employees and Human Capital Resources As of September 30, 2022, we had seventeen full-time employees, five of whom were primarily engaged in research and development activities and four of whom have a Ph.D. degree.
Employees and Human Capital Resources As of September 30, 2023, we had 24 full-time employees, seven of whom were primarily engaged in research and development activities and five of whom have a Ph.D. degree. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
Our commercial strategy for ONS-5010 includes providing an on-label bevacizumab as a first line option for treating retinal diseases. In addition, our approach to responsible price determination is being crafted with the retina community (patients, payors, and providers) to support patient access, maintain physician choice, and accelerate time to treatment.
In addition, our approach to responsible price determination is being crafted with the retina community (patients, payors, and providers) to support patient access, maintain physician choice, and accelerate time to treatment.
Outside of the United States, we intend to either market and launch ourselves or work through a strategic partner.
Outside of the United States, we intend to either market and launch ourselves or work through a strategic partner. If required, Cencora can provide similar services in Europe to support the commercialization of ONS-5010.
Bevacizumab is a full-length, humanized anti-VEGF recombinant mAb that inhibits VEGF and associated angiogenic (the growth of new blood vessels) activity. With wet AMD, abnormally high levels of VEGF are secreted in the eye. VEGF is a protein that promotes the growth of new abnormal blood vessels. Anti-VEGF injection therapy blocks this growth.
We currently intend to commercialize in both vials and pre-filled syringes, if approved. 2 Table of Contents Bevacizumab is a full-length, humanized anti-VEGF recombinant mAb that inhibits VEGF and associated angiogenic (the growth of new blood vessels) activity. With wet AMD, abnormally high levels of VEGF are secreted in the eye.
This patent family will begin to expire worldwide in 2025. Either party may terminate the related agreement in the event of an uncured material breach by the other party or in the event the other party becomes subject to specified bankruptcy, winding up or similar circumstances.
Either party may terminate the related agreement in the event of an uncured material breach by the other party or in the event the other party becomes subject to specified bankruptcy, winding up or similar circumstances. Either party may also terminate the related agreement under designated circumstances if the Selexis Technology infringes third-party intellectual property rights.
The Affordable Care Act, the IRA, as well as other federal, state and foreign healthcare reform measures that have been and may be adopted in the future, could harm our future revenues. International Regulation In addition to regulations in the United States, foreign regulations also govern clinical trials, commercial sales and distribution of product candidates within their jurisdiction.
The Affordable Care Act, the IRA, as well as other federal, state 20 Table of Contents and foreign healthcare reform measures that have been and may be adopted in the future, could harm our future revenues.
In some cases, countries have either adopted European guidance or are following guidance issued by the World Health Organization. Although similarities are apparent across these various regulatory guidance, there is also the potential for additional country-specific requirements.
Although similarities are apparent across these various regulatory guidance, there is also the potential for additional country-specific requirements.
We have also received agreements from the FDA on three SPAs for three additional registration clinical trials for our ongoing Phase 3 program for ONS-5010.
We have agreed to conduct an additional clinical trial (NORSE EIGHT) to support approval of ONS-5010 for the treatment of wet AMD. We have received agreements from the FDA on three Special Protocol Assessments, or SPAs, for three additional registration clinical trials for our ongoing Phase 3 program for ONS-5010.
Annual revenue (worldwide) for anti-VEGF therapies was estimated to be $13.1 billion in 2020 (GlobalData).
Annual revenue (worldwide) for anti-VEGF therapies was estimated to be $13.1 billion in 2020 (GlobalData). The United States accounted for approximately 50% of this market and Europe accounted for approximately 25% in 2020 (Global Data).
If approved, we expect to receive 12 years of regulatory exclusivity in the United States and up to 10 years of regulatory exclusivity in the European Union. Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity.
Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity.
None of our employees are represented by a labor union or covered by a collective bargaining agreement. 20 Table of Contents Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
The study is expected to be completed in 2023 and, if successful, will support the submission of a supplemental BLA to the FDA in 2024. Commercialization, Sales and Marketing Our commercialization strategy is to provide a safe, effective, and affordable on-label bevacizumab for the retina community while maximizing revenue and patient access to ONS-5010.
Commercialization, Sales and Marketing Our commercialization strategy is to provide a safe, effective, and affordable on-label bevacizumab for the retina community while maximizing revenue and patient access to ONS-5010. If approved, we currently intend to launch and market LYTENAVA (bevacizumab-vikg) ourselves in the United States.
However, clinical trial data from other clinical programs may negatively impact our ability to garner future financing or business collaborations, combinations or transactions with other pharmaceutical and biotechnology companies.
Furthermore, we have reduced the risk in our clinical program by leveraging our prior work in developing a biosmilar drug product candidate for Avastin as a treatment for cancer. However, clinical trial data from other clinical programs may negatively impact our ability to garner future financing or business collaborations, combinations or transactions with other pharmaceutical and biotechnology companies.
However, substitution of a biosimilar for the innovator is a decision that is made at the local (national) level on a country-by-country basis. Additionally, a number of European countries do not permit the automatic substitution of biosimilars for the reference product. Many countries also have published their own legislation outlining a regulatory pathway for the development and approval of biosimilars.
Additionally, a number of European countries do not permit the automatic substitution of biosimilars for the reference product. Many countries also have published their own legislation outlining a regulatory pathway for the development and approval of biosimilars. In some cases, countries have either adopted European guidance or are following guidance issued by the World Health Organization.
These reductions went into effect in April 2013 and, due to subsequent legislative amendments will remain in effect until 2031 unless additional Congressional action is taken. The COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through December 31, 2021.
These reductions went into effect in April 2013 and, due to subsequent legislative amendments will remain in effect until 2032 unless additional Congressional action is taken. Under current legislation, the actual reduction in Medicare payments vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.
The regulatory approval process varies from country to country and the time to approval may be longer or shorter than that required for FDA approval. In the European Union, the approval of a biosimilar for marketing is based on an opinion issued by the European Medicines Agency and a decision issued by the European Commission.
In the European Union, the approval of a biosimilar for marketing is based on an opinion issued by the European Medicines Agency and a decision issued by the European Commission. However, substitution of a biosimilar for the innovator is a decision that is made at the local (national) level on a country-by-country basis.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition could suffer. 53 Table of Contents Risks Related to Our Business Operations Our business could be adversely affected by the effects of health pandemics or epidemics, including the ongoing COVID-19 global pandemic, in regions where we or third parties on which we rely have significant manufacturing facilities, concentrations of clinical trial sites or other business operations, or materially affect our operations, including at our headquarters in New Jersey, and at our clinical trial sites, as well as the business or operations of our manufacturers, CROs or other third parties with whom we conduct business.
Biggest changeIf we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition could suffer.
This additional funding may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. Developing product candidates is an expensive, risky and lengthy process. We are currently advancing ONS-5010 through the regulatory approval process and additional clinical development.
This additional funding may not be available on acceptable terms or at all. Failure to obtain this necessary capital when needed may force us to delay, limit or terminate our product development efforts or other operations. Developing product candidates is an expensive, risky and lengthy process. We are currently advancing ONS-5010 through additional clinical development and the regulatory approval process.
Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by all or a portion of our assets.
Additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, and may be secured by all or a portion of our assets.
The healthcare laws that may affect our ability to operate include but are not limited to: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce, reward, or in return for either the referral of an individual for, or the purchase, recommendation, order or furnishing of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which can be enforced by private individuals through civil whistleblower or qui tam actions, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented claims for payment from Medicare, Medicaid or other government health programs that are false or fraudulent; 58 Table of Contents ● HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which imposes certain requirements, including mandatory contractual terms, relating to the privacy, security and transmission of individually identifiable health information on health plans, certain healthcare providers, and healthcare clearinghouses, known as covered entities, and their business associates that provide services to the covered entity that involve individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information; ● the federal legislation commonly referred to as the Physician Payments Sunshine Act under the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value made by such manufacturers to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● analogous state and foreign laws and regulations, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures or drug pricing; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
The healthcare laws that may affect our ability to operate include but are not limited to: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce, reward, or in return for either the referral of an individual for, or the purchase, recommendation, order or furnishing of an item or service reimbursable, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the civil False Claims Act, which can be enforced by private individuals through civil whistleblower or qui tam actions, which prohibit, among other things, individuals or entities from knowingly presenting or causing to be presented claims for payment from Medicare, Medicaid or other government health programs that are false or fraudulent; 61 Table of Contents ● HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, which imposes certain requirements, including mandatory contractual terms, relating to the privacy, security and transmission of individually identifiable health information on health plans, certain healthcare providers, and healthcare clearinghouses, known as covered entities, and their business associates that provide services to the covered entity that involve individually identifiable health information and their subcontractors that use, disclose or otherwise process individually identifiable health information; ● the federal legislation commonly referred to as the Physician Payments Sunshine Act under the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services information related to payments and other transfers of value made by such manufacturers to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare providers (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and ● analogous state and foreign laws and regulations, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures or drug pricing; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Obtaining approval from the FDA or similar regulatory approval is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or other foreign regulatory authorities may delay, limit or deny approval of ONS-5010 for many reasons, including: ● we may not be able to demonstrate that ONS-5010 is effective as a treatment for any of our currently targeted indications to the satisfaction of the FDA or other relevant regulatory authorities; 25 Table of Contents ● the relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase our costs and prolong our development timelines; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval; ● the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the FDA or other relevant regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of these products outweigh their safety risks; ● the FDA or other relevant regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studies and clinical trials of ONS-5010 and any future product candidate, or may require that we conduct additional trials; ● the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy, or REMS, or its equivalent, as a condition of approval; ● the FDA or other relevant regulatory authorities may require additional post-marketing studies, which would be costly; ● the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers; or ● the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.
Obtaining approval from the FDA or similar regulatory approval is an extensive, lengthy, expensive and inherently uncertain process, and the FDA or other foreign regulatory authorities may delay, limit or deny approval of ONS-5010 for many reasons, including: ● we may not be able to demonstrate that ONS-5010 is effective as a treatment for any of our currently targeted indications to the satisfaction of the FDA or other relevant regulatory authorities; ● the relevant regulatory authorities may require additional pre-approval studies or clinical trials, which would increase our costs and prolong our development timelines; ● the results of our clinical trials may not meet the level of statistical or clinical significance required by the FDA or other relevant regulatory authorities for marketing approval; ● the FDA or other relevant regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical trials; ● the FDA or other relevant regulatory authorities may not find the data from nonclinical studies or clinical trials sufficient to demonstrate that the clinical and other benefits of these products outweigh their safety risks; ● the FDA or other relevant regulatory authorities may disagree with our interpretation of data or significance of results from the nonclinical studies and clinical trials of ONS-5010 and any future product candidate, or may require that we conduct additional trials; ● the FDA or other relevant regulatory authorities may require development of a risk evaluation and mitigation strategy, or REMS, or its equivalent, as a condition of approval; ● the FDA or other relevant regulatory authorities may require additional post-marketing studies, which would be costly; ● the FDA or other relevant regulatory authorities may identify deficiencies in the manufacturing processes or facilities of our third-party manufacturers; or 27 Table of Contents ● the FDA or other relevant regulatory authorities may change their approval policies or adopt new regulations.
Events that may prevent successful or timely completion of clinical development include but are not limited to: ● inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical trials; ● delays in reaching a consensus with regulatory agencies on study design; ● delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● delays in obtaining required IRB approval at each clinical trial site; ● imposition of a clinical hold by regulatory agencies, after review of an IND, application or amendment or equivalent filing, or an inspection of our clinical trial operations or trial sites, or as a result of adverse events reported during a clinical trial; ● further delays in recruiting suitable patients to participate in our clinical trials; ● difficulty collaborating with patient groups and investigators; ● failure by our CROs, other third parties or us to adhere to clinical trial requirements; ● failure to perform in accordance with the FDA’s good clinical practice, or GCP, requirements or applicable regulatory guidelines in other countries; ● delays in having subjects complete participation in a study or return for post-treatment follow-up, or subjects dropping out of a study; ● occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● the cost of clinical trials of our product candidates being greater than we anticipate; ● clinical trials of our product candidates producing negative or inconclusive results, which may result in us deciding or regulators requiring us to conduct additional clinical trials or abandon product development programs; and ● delays in manufacturing, testing, releasing, validating or importing/exporting and/or distributing sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.
Events that may prevent successful or timely completion of clinical development include but are not limited to: ● inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical trials; ● delays in reaching a consensus with regulatory agencies on study design; ● delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites; ● delays in obtaining required IRB approval at each clinical trial site; 28 Table of Contents ● imposition of a clinical hold by regulatory agencies, after review of an IND, application or amendment or equivalent filing, or an inspection of our clinical trial operations or trial sites, or as a result of adverse events reported during a clinical trial; ● further delays in recruiting suitable patients to participate in our clinical trials; ● difficulty collaborating with patient groups and investigators; ● failure by our CROs, other third parties or us to adhere to clinical trial requirements; ● failure to perform in accordance with the FDA’s good clinical practice, or GCP, requirements or applicable regulatory guidelines in other countries; ● delays in having subjects complete participation in a study or return for post-treatment follow-up, or subjects dropping out of a study; ● occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits; ● changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; ● the cost of clinical trials of our product candidates being greater than we anticipate; ● clinical trials of our product candidates producing negative or inconclusive results, which may result in us deciding or regulators requiring us to conduct additional clinical trials or abandon product development programs; and ● delays in manufacturing, testing, releasing, validating or importing/exporting and/or distributing sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.
The degree of market acceptance of any of our product candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to: ● the safety and efficacy of the product in clinical trials, and potential advantages over competing treatments; ● the publication of unfavorable safety or efficacy data concerning our product by third-parties; ● the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; ● the clinical indications for which approval is granted; ● recognition and acceptance of our product candidates over our competitors’ products; ● prevalence of the disease or condition for which the product is approved; ● the cost of treatment, particularly in relation to competing treatments; 37 Table of Contents ● the willingness of the target patient population to try our therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support and timing of market introduction of competitive products; ● the extent to which the product is approved for inclusion on formularies of hospitals and managed care organizations; ● publicity concerning our products or competing products and treatments; ● the extent to which third-party payors provide coverage and adequate reimbursement for ONS-5010, or any other product candidates we may pursue, if approved; ● our ability to maintain compliance with regulatory requirements; and ● labeling or naming imposed by FDA or other regulatory agencies.
The degree of market acceptance of any of our product candidates, if approved for commercial sale, will depend on a number of factors, including but not limited to: ● the safety and efficacy of the product in clinical trials, and potential advantages over competing treatments; ● the publication of unfavorable safety or efficacy data concerning our product by third-parties; ● the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; ● the clinical indications for which approval is granted; ● recognition and acceptance of our product candidates over our competitors’ products; ● prevalence of the disease or condition for which the product is approved; ● the cost of treatment, particularly in relation to competing treatments; ● the willingness of the target patient population to try our therapies and of physicians to prescribe these therapies; ● the strength of marketing and distribution support and timing of market introduction of competitive products; 40 Table of Contents ● the extent to which the product is approved for inclusion on formularies of hospitals and managed care organizations; ● publicity concerning our products or competing products and treatments; ● the extent to which third-party payors provide coverage and adequate reimbursement for ONS-5010, or any other product candidates we may pursue, if approved; ● our ability to maintain compliance with regulatory requirements; and ● labeling or naming imposed by FDA or other regulatory agencies.
Even with the requisite approvals from the FDA and comparable foreign regulatory authorities, the commercial success of ONS-5010 or any other product candidates we may pursue will depend in part on the medical community, patients and third-party payors accepting our product candidates as medically useful, cost-effective and safe.
Even with the requisite approvals from the FDA, EMA and comparable foreign regulatory authorities, the commercial success of ONS-5010 or any other product candidates we may pursue will depend in part on the medical community, patients and third-party payors accepting our product candidates as medically useful, cost-effective and safe.
Under current law, federal NOLs incurred in taxable years beginning after December 31, 2017, can be carried forward indefinitely, but the deductibility of such federal NOLs in taxable years beginning after December 31, 2020 is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the federal tax laws.
Under current law, federal NOLs incurred in taxable years beginning after December 31, 2017, can be carried forward indefinitely, but the deductibility of such federal NOLs is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the federal tax laws.
If sales of our marketed products do not meet the levels currently expected, or if the launch of any of our product candidates is delayed or unsuccessful, we may face costs related to excess inventory or unused capacity at our manufacturing facilities and at the facilities of third parties or our collaborators.
If the launch of any of our product candidates is further delayed or unsuccessful, or if sales of our marketed products do not meet the levels currently expected, we may face costs related to excess inventory or unused capacity at our manufacturing facilities and at the facilities of third parties or our collaborators.
These fluctuations may occur due to a variety of factors, many of which are out of our control and may be difficult to predict, including but not limited to: ● our ability to successfully develop, market and sell ONS-5010 and any other product candidates; ● the cost of clinical development for ONS-5010 and any other product candidates; ● the success of competitive products or technologies; ● results of clinical trials of our product candidates or those of our competitors; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to any of our product candidates or clinical development programs; ● the results of our efforts to discover, develop, manufacture, acquire or in-license additional product candidates; ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions; and ● the other factors described in this “Risk Factors” section.
These fluctuations may occur due to a variety of factors, many of which are out of our control and may be difficult to predict, including but not limited to: ● our ability to successfully develop, market and sell ONS-5010 and any other product candidates; ● the cost of clinical development for ONS-5010 and any other product candidates; ● the success of competitive products or technologies; ● results of clinical trials of our product candidates or those of our competitors; ● developments or disputes concerning patent applications, issued patents or other proprietary rights; ● the recruitment or departure of key personnel; ● the level of expenses related to any of our product candidates or clinical development programs; ● the results of our efforts to discover, develop, manufacture, acquire or in-license additional product candidates; 69 Table of Contents ● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; ● variations in our financial results or those of companies that are perceived to be similar to us; ● market conditions in the pharmaceutical and biotechnology sectors; ● general economic, industry and market conditions; and ● the other factors described in this “Risk Factors” section.
For example, enrollment in the NORSE ONE and NORSE TWO studies was delayed from our original expectations. We could experience similar enrollment delays in the remaining NORSE trials (FOUR, FIVE, SIX and SEVEN) once they are initiated.
For example, enrollment in the NORSE ONE and NORSE TWO studies was delayed from our original expectations. We could experience similar enrollment delays in the remaining NORSE trials (FOUR, FIVE, SIX, SEVEN and EIGHT) once they are initiated.
In addition, the combinations will likely not have been previously tested and may, among other 61 Table of Contents things, fail to demonstrate synergistic activity, may fail to achieve superior outcomes relative to the use of single agents or other combination therapies, may exacerbate adverse events associated with one of our product candidates when used as monotherapy or may fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.
In addition, the combinations will likely not have been previously tested and may, among other 64 Table of Contents things, fail to demonstrate synergistic activity, may fail to achieve superior outcomes relative to the use of single agents or other combination therapies, may exacerbate adverse events associated with one of our product candidates when used as monotherapy or may fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.
If any of these events occur, we may be forced to abandon our development efforts for a program or programs or we may not be able to identify, develop or commercialize additional product candidates, which would harm our business and could potentially cause us to cease operations. 55 Table of Contents We are highly dependent on the services of our key executives and personnel, and if we are not able to retain these members of our management or recruit additional management, clinical and scientific personnel, our business will suffer.
If any of these events occur, we may be forced to abandon our development efforts for a program or programs or we may not be able to identify, develop or commercialize additional product candidates, which would harm our business and could potentially cause us to cease operations. 58 Table of Contents We are highly dependent on the services of our key executives and personnel, and if we are not able to retain these members of our management or recruit additional management, clinical and scientific personnel, our business will suffer.
We may also have to take inventory write-offs and incur other charges and expenses for product candidates that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. We may depend on third parties for the commercialization of ONS-5010, and failure to commercialize in those markets could harm our business and operating results.
We may also have to take inventory write-offs and incur other charges and expenses for product candidates that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. We may depend on third parties for the commercialization of ONS-5010, and failure to commercialize in the relevant markets could harm our business and operating results.
In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more 60 Table of Contents stringent.
In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more 63 Table of Contents stringent.
Patient enrollment is also affected by other factors, including: ● severity of the disease under investigation; ● our ability to recruit clinical trial investigators of appropriate competencies and experience; ● invasive procedures required to obtain evidence of the product candidate’s performance during the clinical trial; ● availability and efficacy of approved medications for the disease under investigation; ● eligibility criteria defined in the protocol for the trial in question; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● perceived risks and benefits; ● efforts to facilitate timely enrollment in clinical trials; ● reluctance of physicians to encourage patient participation in clinical trials; ● the ability to monitor patients adequately during and after treatment; ● our ability to obtain and maintain patient consents; and ● proximity and availability of clinical trial sites for prospective patients.
Patient enrollment is also affected by other factors, including: ● severity of the disease under investigation; ● our ability to recruit clinical trial investigators of appropriate competencies and experience; ● invasive procedures required to obtain evidence of the product candidate’s performance during the clinical trial; 36 Table of Contents ● availability and efficacy of approved medications for the disease under investigation; ● eligibility criteria defined in the protocol for the trial in question; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● perceived risks and benefits; ● efforts to facilitate timely enrollment in clinical trials; ● reluctance of physicians to encourage patient participation in clinical trials; ● the ability to monitor patients adequately during and after treatment; ● our ability to obtain and maintain patient consents; and ● proximity and availability of clinical trial sites for prospective patients.
In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional clinical trials to bridge our modified product candidates to earlier versions. 27 Table of Contents The results of previous clinical trials may not be predictive of future results, and the results of our current and planned clinical trials may not satisfy the requirements of the FDA, EMA or other foreign regulatory agencies.
In addition, if we make manufacturing or formulation changes to our product candidates, we may need to conduct additional clinical trials to bridge our modified product candidates to earlier versions. 29 Table of Contents The results of previous clinical trials may not be predictive of future results, and the results of our current and planned clinical trials may not satisfy the requirements of the FDA, EMA or other foreign regulatory agencies.
There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timely manner, if ever, which could harm our business, prospects and financial condition. ​ 28 Table of Contents Additionally, product quality characteristics have been shown to be sensitive to changes in process conditions, manufacturing techniques, equipment or sites and other related considerations, and as such, any manufacturing process changes we implement prior to or after regulatory approval could impact product safety.
There can be no assurance that we will resolve any issues related to any product-related adverse events to the satisfaction of the FDA or any other regulatory agency in a timely manner, if ever, which could harm our business, prospects and financial condition. ​ Additionally, product quality characteristics have been shown to be sensitive to changes in process conditions, manufacturing techniques, equipment or sites and other related considerations, and as such, any manufacturing process changes we implement prior to or after regulatory approval could impact product safety.
Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. 59 Table of Contents The international aspects of our business expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired. 62 Table of Contents The international aspects of our business expose us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.
If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things: ● issue untitled and warning letters; ● impose civil or criminal penalties; 30 Table of Contents ● suspend or withdraw regulatory approval; ● suspend any of our ongoing clinical trials; ● refuse to approve pending applications or supplements to approved applications submitted by us; ● impose restrictions on our operations, including closing our manufacturing facilities; or ● seize or detain products or require a product recall.
If we fail to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things: ● issue untitled and warning letters; ● impose civil or criminal penalties; ● suspend or withdraw regulatory approval; ● suspend any of our ongoing clinical trials; ● refuse to approve pending applications or supplements to approved applications submitted by us; ● impose restrictions on our operations, including closing our manufacturing facilities; or ● seize or detain products or require a product recall.
Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our technological achievements, thus eroding our competitive position in our market.
Any disclosure, either intentional or unintentional, by our employees, the employees of third parties with whom we share our facilities or third-party consultants and vendors that we engage to perform research, clinical trials or manufacturing activities, or misappropriation by third parties (such as through a cybersecurity breach) of our trade secrets or proprietary information could enable competitors to duplicate or surpass our 47 Table of Contents technological achievements, thus eroding our competitive position in our market.
Our amended and restated certificate of incorporation and our amended and restated bylaws, each as amended, provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws, each as amended, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation and our amended and restated bylaws, each as amended, provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation 73 Table of Contents Law, our amended and restated certificate of incorporation or our amended and restated bylaws, each as amended, or any action asserting a claim against us that is governed by the internal affairs doctrine.
In addition, regardless of merit or eventual outcome, product liability claims may result in impairment of our business reputation, withdrawal of clinical trial participants, costs due to related litigation, distraction of management’s attention from our primary business, initiation of investigations by regulators, substantial monetary awards to patients or other claimants, the inability to commercialize our product candidates and decreased demand for our product candidates, if approved for commercial sale.
In addition, regardless of merit or eventual outcome, product liability claims 31 Table of Contents may result in impairment of our business reputation, withdrawal of clinical trial participants, costs due to related litigation, distraction of management’s attention from our primary business, initiation of investigations by regulators, substantial monetary awards to patients or other claimants, the inability to commercialize our product candidates and decreased demand for our product candidates, if approved for commercial sale.
Even if coverage is provided, the approved reimbursement amount may not be adequate to allow us to realize a return on our investment. 39 Table of Contents There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
Even if coverage is provided, the approved reimbursement amount may not be adequate to allow us to realize a return on our investment. 42 Table of Contents There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products.
There is no certainty that all of our employees, agents, suppliers, manufacturers, contractors, or collaborators, or those of 62 Table of Contents our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.
There is no certainty that all of our employees, agents, suppliers, manufacturers, contractors, or collaborators, or those of 65 Table of Contents our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.
A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business. 44 Table of Contents We are required to co-fund the development of, and proportionately share in the revenue from, the commercialization of ONS-3010 in the United States, Canada, E.U., Japan, Australia and New Zealand under a joint participation agreement with Huahai.
A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business. We are required to co-fund the development of, and proportionately share in the revenue from, the commercialization of ONS-3010 in the United States, Canada, E.U., Japan, Australia and New Zealand under a joint participation agreement with Huahai.
As in the case of our formulation patent filings, it is highly uncertain and we cannot predict whether our patent filings on process enhancements will afford us a competitive advantage against third parties. Obtaining and maintaining our patent protection depends on compliance with various procedural requirements, document submissions, fee payment and other requirements imposed by governmental patent agencies.
As in the case of our formulation patent filings, it is highly uncertain and we cannot predict whether our patent filings on process enhancements will afford us a competitive advantage against third parties. 53 Table of Contents Obtaining and maintaining our patent protection depends on compliance with various procedural requirements, document submissions, fee payment and other requirements imposed by governmental patent agencies.
There can be no assurance that our completed and submitted BLA or MAA of ONS-5010 for wet AMD, or planned future, clinical trials for other retina indications, will ultimately meet the requirements sufficient for us to receive regulatory approval. For example, in May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA.
There can be no assurance that BLA or MAA of ONS-5010 for wet AMD, or planned future, clinical trials for other retina indications, will ultimately meet the requirements sufficient for us to receive regulatory approval. For example, in May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA.
Any actual or alleged 40 Table of Contents failure to comply with labeling and promotion requirements may result in fines, warning letters, mandates to corrective information to healthcare practitioners, injunctions, or civil or criminal penalties.
Any actual or alleged 43 Table of Contents failure to comply with labeling and promotion requirements may result in fines, warning letters, mandates to corrective information to healthcare practitioners, injunctions, or civil or criminal penalties.
A delay in the development of ONS-5010 or having to enter into a new agreement with a different third party on less favorable terms than we have with our current suppliers could negatively impact our business. Risks Related to Intellectual Property If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.
A delay in the development of ONS-5010 or having to enter into a new agreement with a different third party on less favorable terms than we have with our current suppliers could negatively impact our business. 48 Table of Contents Risks Related to Intellectual Property If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be harmed.
If we are unable to establish sales and marketing capabilities for any approved product, whether on our own or through collaborations, our results of operations will be negatively impacted. We may need to enter into alliances with other companies that can provide capabilities and funds for the development and commercialization of product candidates.
If we are unable 41 Table of Contents to establish sales and marketing capabilities for any approved product, whether on our own or through collaborations, our results of operations will be negatively impacted. We may need to enter into alliances with other companies that can provide capabilities and funds for the development and commercialization of product candidates.
Some of the pharmaceutical and 36 Table of Contents biotechnology companies we expect to compete with include, for example, Novartis, which currently markets LUCENTIS and BEOVU, Regeneron, with its product EYLEA, Genentech, the marketer of VABYSMO, and both Biogen and Coherus with their biosimilar formulations of LUCENTIS, all of which have been approved for use in patients with wet AMD.
Some of the pharmaceutical and biotechnology companies we expect to compete with include, for example, Novartis, which currently markets LUCENTIS and BEOVU, Regeneron, with its product EYLEA, Genentech, the marketer of VABYSMO, and both Biogen and Coherus with their biosimilar formulations of LUCENTIS, all of which have been approved for use in patients with wet AMD.
Furthermore, for applications filed before March 16, 2013 or patents issuing from such applications, an interference 49 Table of Contents proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications and patents.
Furthermore, for applications filed before March 16, 2013 or patents issuing from such applications, an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications and patents.
If a regulatory agency discovers previously unknown problems with an approved product, such as adverse events of unanticipated severity or frequency or problems with our manufacturing facilities or disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
If a regulatory agency discovers previously unknown problems with an approved product, such as adverse events of unanticipated severity or frequency or problems with our manufacturing facilities or disagrees with the promotion, 32 Table of Contents marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.
Furthermore, the cancer drug Avastin, sold by Roche, is used off-label in wet AMD patients although it has not been approved for use in these patients. Our ONS-5010 is being developed as an approved alternative to the use of off-label Avastin as well as the much more expensive approved therapies.
Furthermore, the cancer drug Avastin, sold by Roche, is used off-label in wet AMD patients although it has not been 39 Table of Contents approved for use in these patients. Our ONS-5010 is being developed as an approved alternative to the use of off-label Avastin as well as the much more expensive approved therapies.
Any significant delay or discontinuation in the supply of a product candidate for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates, which could harm our business and results of operations.
Any significant 45 Table of Contents delay or discontinuation in the supply of a product candidate for an ongoing clinical trial due to the need to replace a third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our product candidates, which could harm our business and results of operations.
Among some of the other significant changes to the patent laws are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO via procedures including post-grant and inter partes review.
Among some of the 54 Table of Contents other significant changes to the patent laws are changes that limit where a patentee may file a patent infringement suit and provide opportunities for third parties to challenge any issued patent in the USPTO via procedures including post-grant and inter partes review.
Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, toxicity or other safety issues, and could require us to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits that will harm our business.
Results of our trials could reveal a high and unacceptable severity and prevalence of side effects, toxicity or 30 Table of Contents other safety issues, and could require us to perform additional studies or halt development or sale of these product candidates or expose us to product liability lawsuits that will harm our business.
GMS Ventures and Tenshi beneficially own a significant percentage of our common stock, and GMS Ventures has the right to designate members to our board of directors and is able to exert significant control over matters subject to stockholder approval, which could prevent new investors from influencing significant corporate decisions.
GMS Ventures beneficially owns a significant percentage of our common stock and has the right to designate members to our board of directors and is able to exert significant control over matters subject to stockholder approval, which could prevent new investors from influencing significant corporate decisions.
We cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each 45 Table of Contents and every patent and pending application in the United States and abroad that is relevant or necessary to the commercialization of our product candidates.
We cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each and every patent and pending application in the United States and abroad that is relevant or necessary to the commercialization of our product candidates.
We currently estimate that we could potentially begin generating revenue from product sales in the fourth quarter of calendar 2023, but this depends heavily on our success in many areas, including but not limited to: ● completing clinical development of ONS-5010 for the treatment of wet AMD and the other targeted indications, and any other product candidates we may develop in the future; ● obtaining regulatory and marketing approvals for ONS-5010 and any other product candidates for which we or our partners complete clinical trials; ● retaining our manufacturing partner for ONS-5010 and any approved product candidates to support clinical development, regulatory requirements and the market demand for any such approved product candidates; ● launching and commercializing ONS-5010 and any other product candidates for which we or our partners obtain regulatory and marketing approval; ● obtaining third-party coverage and adequate reimbursements for our products; 22 Table of Contents ● obtaining market acceptance of ONS-5010 and any other product candidates for which we obtain regulatory and marketing approval as viable treatment options; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and ● attracting, hiring and retaining qualified personnel.
We currently estimate that we could potentially begin generating revenue from product sales as early as late 2025, but this depends heavily on our success in many areas, including but not limited to: ● completing clinical development of ONS-5010 for the treatment of wet AMD and the other targeted indications, and any other product candidates we may develop in the future; ● obtaining regulatory and marketing approvals for ONS-5010 and any other product candidates for which we or our partners complete clinical trials; ● retaining our manufacturing partner for ONS-5010 and any approved product candidates to support clinical development, regulatory requirements and the market demand for any such approved product candidates; ● launching and commercializing ONS-5010 and any other product candidates for which we or our partners obtain regulatory and marketing approval; ● obtaining third-party coverage and adequate reimbursements for our products; ● obtaining market acceptance of ONS-5010 and any other product candidates for which we obtain regulatory and marketing approval as viable treatment options; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; 23 Table of Contents ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and ● attracting, hiring and retaining qualified personnel.
If, as a result of patent infringement claims or to avoid potential claims, we choose or are required to seek licenses from third parties, these licenses may not be available on acceptable terms or at all.
If, as a result of patent infringement claims or to avoid potential claims, we choose or are required to seek licenses from third parties, these licenses may not be available on acceptable 49 Table of Contents terms or at all.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual 48 Table of Contents property rights. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our senior management and scientific personnel.
Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret. We cannot guarantee that our employees, former employees or consultants will not file patent applications claiming our inventions.
Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating any trade secret. We cannot guarantee that our employees, former 55 Table of Contents employees or consultants will not file patent applications claiming our inventions.
Because we may find that our programs require the use of proprietary rights held by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights.
Because we may find that our programs require the use of proprietary rights held 56 Table of Contents by third parties, the growth of our business may depend in part on our ability to acquire, in-license or use these proprietary rights.
The market price of our securities could be subject to wide fluctuations in response to a variety of factors, including but not limited to: ● the success of competitive services, products or technologies; ● adverse results or delays in preclinical or clinical trials; ● any inability to obtain additional funding; ● any delay in filing an IND, BLA or other regulatory submission for ONS-5010, or any of our product candidates when planned, and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, BLA or other regulatory submission; ● the perception of limited market sizes or pricing for ONS-5010 or any of our other product candidates; ● failure to successfully develop and commercialize ONS-5010 or any of our other product candidates; ● post-marketing safety issues relating to our product candidates generally; ● failure to maintain our existing strategic collaborations or enter into new collaborations; ● failure by us or our licensors and strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; ● changes in laws or regulations applicable to our products; ● any inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; ● adverse regulatory decisions; ● introduction of new products, services or technologies by our competitors; 64 Table of Contents ● failure to meet or exceed financial projections we may provide to the public; ● failure to meet or exceed the financial projections of the investment community; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● significant lawsuits, including stockholder litigation and litigation filed by us or filed against us pertaining to patent infringement or other violations of intellectual property rights; ● the outcomes of any citizens petitions filed by parties seeking to restrict or limit the approval of our product candidates; if securities or industry analysts do not publish research or reports about our business or if they issue an adverse or misleading opinion regarding our stock; ● changes in the market valuations of similar companies; ● general economic, industry or market conditions; ● sales of our securities by us or our stockholders in the future; ● trading volume of our securities; ● issuance of patents to third parties that could prevent our ability to commercialize our product candidates; ● the loss of one or more employees constituting our leadership team; ● changes in regulatory requirements that could make it more difficult for us to develop our product candidates; and ● the other factors described in this “Risk Factors” section.
The market price of our securities could be subject to wide fluctuations in response to a variety of factors, including but not limited to: ● the success of competitive services, products or technologies; ● adverse results or delays in preclinical or clinical trials; ● any inability to obtain additional funding; ● any delay in filing an IND, BLA or other regulatory submission for ONS-5010, or any of our product candidates when planned, and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, BLA or other regulatory submission; ● the perception of limited market sizes or pricing for ONS-5010 or any of our other product candidates; ● failure to successfully develop and commercialize ONS-5010 or any of our other product candidates; ● post-marketing safety issues relating to our product candidates generally; ● failure to maintain our existing strategic collaborations or enter into new collaborations; 67 Table of Contents ● failure by us or our licensors and strategic collaboration partners to prosecute, maintain or enforce our intellectual property rights; ● changes in laws or regulations applicable to our products; ● any inability to obtain adequate product supply for our product candidates or the inability to do so at acceptable prices; ● adverse regulatory decisions; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial projections we may provide to the public; ● failure to meet or exceed the financial projections of the investment community; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us, our strategic collaboration partners or our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; ● additions or departures of key scientific or management personnel; ● significant lawsuits, including stockholder litigation and litigation filed by us or filed against us pertaining to patent infringement or other violations of intellectual property rights; ● the outcomes of any citizens petitions filed by parties seeking to restrict or limit the approval of our product candidates; if securities or industry analysts do not publish research or reports about our business or if they issue an adverse or misleading opinion regarding our stock; ● changes in the market valuations of similar companies; ● general economic, industry or market conditions; ● sales of our securities by us or our stockholders in the future; ● trading volume of our securities; ● issuance of patents to third parties that could prevent our ability to commercialize our product candidates; ● the loss of one or more employees constituting our leadership team; ● changes in regulatory requirements that could make it more difficult for us to develop our product candidates; and ● the other factors described in this “Risk Factors” section. 68 Table of Contents As further discussed in the Risk Factor above entitled “We and certain of our officers have been named as defendants in a pending securities class action lawsuit.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: ● the FDA disagreeing as to the design or implementation of our clinical studies; ● obtaining FDA authorizations to commence a trial or reaching a consensus with the FDA on trial design; ● any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining approval from one or more IRBs; ● IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; ● changes to clinical trial protocol; ● clinical sites deviating from trial protocol or dropping out of a trial; ● manufacturing sufficient quantities of product candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; ● subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up, including as a result of the ongoing COVID-19 global pandemic; ● subjects choosing an alternative treatment, or participating in competing clinical trials; ● lack of adequate funding to continue the clinical trial; ● subjects experiencing severe or unexpected drug-related adverse effects; ● occurrence of serious adverse events in trials of the same class of agents conducted by other companies; ● selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; ● a facility manufacturing our product candidates or any of their components being ordered by the FDA to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; ● any changes to our manufacturing process that may be necessary or desired; ● third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; ● third-party contractors not performing data collection or analysis in a timely or accurate manner; or ● third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications. 33 Table of Contents We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trials are being conducted, by a Data Safety Monitoring Board for such trial or by the FDA.
The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to: ● the FDA disagreeing as to the design or implementation of our clinical studies; ● obtaining FDA authorizations to commence a trial or reaching a consensus with the FDA on trial design; ● any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● obtaining approval from one or more IRBs; ● IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the trial; ● changes to clinical trial protocol; ● clinical sites deviating from trial protocol or dropping out of a trial; ● manufacturing sufficient quantities of product candidate or obtaining sufficient quantities of combination therapies for use in clinical trials; ● subjects failing to enroll or remain in our trial at the rate we expect, or failing to return for post-treatment follow-up; ● subjects choosing an alternative treatment, or participating in competing clinical trials; ● lack of adequate funding to continue the clinical trial; ● subjects experiencing severe or unexpected drug-related adverse effects; 35 Table of Contents ● occurrence of serious adverse events in trials of the same class of agents conducted by other companies; ● selection of clinical end points that require prolonged periods of clinical observation or analysis of the resulting data; ● a facility manufacturing our product candidates or any of their components being ordered by the FDA to temporarily or permanently shut down due to violations of cGMP, regulations or other applicable requirements, or infections or cross-contaminations of product candidates in the manufacturing process; ● any changes to our manufacturing process that may be necessary or desired; ● third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP, or other regulatory requirements; ● third-party contractors not performing data collection or analysis in a timely or accurate manner; or ● third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications.
Our expenses may increase in connection with our ongoing activities, particularly as we continue the research and development of, continue and initiate clinical trials of, and seek marketing approval for, ONS-5010. As of September 30, 2022, our cash and cash equivalents balance was $17.4 million.
Our expenses may increase in connection with our ongoing activities, particularly as we continue the research and development of, continue and initiate clinical trials of, and seek marketing approval for, ONS-5010. As of September 30, 2023, our cash and cash equivalents balance was $23.4 million.
With respect to certain geographical markets, we may enter into collaborations with other entities to utilize their local marketing and distribution capabilities, but we 38 Table of Contents may be unable to enter into such agreements on favorable terms, if at all.
With respect to certain geographical markets, we may enter into collaborations with other entities to utilize their local marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all.
Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our product candidates or prevent others from designing around our claims.
Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property, provide exclusivity for our product candidates or 52 Table of Contents prevent others from designing around our claims.
These factors can be exacerbated by other situations, such as the ongoing COVID-19 global pandemic, which impacted enrollment in our NORSE 2 clinical trial. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
These factors can be exacerbated by other situations, for example, in 2020, the COVID-19 global pandemic impacted enrollment in our NORSE 2 clinical trial. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.
A failure of one or more clinical trials can occur at any stage of testing, and our future clinical trials may not be 26 Table of Contents successful.
A failure of one or more clinical trials can occur at any stage of testing, and our future clinical trials may not be successful.
GMS Ventures and Tenshi have the ability to influence our company through their ownership positions and GMS Ventures also has the ability to influence our company through its representation on our board of directors, both of which may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of our securityholders.
GMS Ventures has the ability to influence our company through its ownership position and its representation on our board of directors, both of which may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of our securityholders.
If any analysts who cover us downgrade our securities or change their opinion of our securities, the market price of our securities would 66 Table of Contents likely decline.
If any analysts who cover us downgrade our securities or change their opinion of our securities, the market price of our securities would likely decline.
We anticipate that our expenses may increase substantially if and as we: ● prepare to launch and market ONS-5010 (LYTENAVA (bevacizumab-vikg)), if approved; ● continue the clinical development of ONS-5010; ● advance ONS-5010 into additional clinical trials; ● change or add contract manufacturing providers, clinical research service providers, testing laboratories, device suppliers, legal service providers or other vendors or suppliers; 21 Table of Contents ● seek regulatory and marketing approvals for ONS-5010 in the United States and other markets if we successfully complete clinical trials; ● establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval and for which we retain such rights; ● seek to identify, assess, acquire or develop other product candidates that may be complementary to ONS-5010; ● make upfront, milestone, royalty or other payments under any license agreements; ● seek to create, maintain, protect and expand our intellectual property portfolio; ● engage in litigation, including patent litigation, with respect to our product candidates; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our operations as a public company and any future commercialization efforts; and ● experience any delays or encounter issues with any of the above, including but not limited to failed clinical trials, conflicting results, safety issues or regulatory challenges that may require longer follow-up of existing studies, additional major studies or additional supportive studies in order to pursue marketing approval.
We anticipate that our expenses may increase substantially if and as we: ● conduct an additional clinical trial of ONS-5010 for the treatment of wet AMD, as required by the FDA; ● prepare to launch and market ONS-5010 (LYTENAVA (bevacizumab-vikg)), if approved; ● continue the clinical development of ONS-5010; ● advance ONS-5010 into additional clinical trials; ● change or add contract manufacturing providers, clinical research service providers, testing laboratories, device suppliers, legal service providers or other vendors or suppliers; ● seek regulatory and marketing approvals for ONS-5010 in the United States and other markets if we successfully complete clinical trials; 22 Table of Contents ● establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval and for which we retain such rights; ● seek to identify, assess, acquire or develop other product candidates that may be complementary to ONS-5010; ● make upfront, milestone, royalty or other payments under any license agreements; ● seek to create, maintain, protect and expand our intellectual property portfolio; ● engage in litigation, including the pending securities class action lawsuit, as well as any other potential litigation; ● seek to attract and retain skilled personnel; ● create additional infrastructure to support our operations as a public company and any future commercialization efforts; and ● experience any delays or encounter issues with any of the above, including but not limited to failed clinical trials, conflicting results, safety issues or regulatory challenges that may require longer follow-up of existing studies, additional major studies or additional supportive studies in order to pursue marketing approval.
Any failure or refusal to supply the components for our product candidates that we may develop could delay, prevent or impair our clinical 42 Table of Contents development or commercialization efforts.
Any failure or refusal to supply the components for our product candidates that we may develop could delay, prevent or impair our clinical development or commercialization efforts.
On August 16, 2022, President Biden signed the Inflation Reduction Act, or the IRA. The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as an exercise tax 68 Table of Contents on stock repurchases, both provisions are effective for tax years beginning after December 31, 2022.
On August 16, 2022, President Biden signed into law the Inflation Reduction Act, or the IRA. The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as an excise tax on stock repurchases, both provisions are effective for tax years beginning after December 31, 2022.
This provision would not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended, or any other claim for which the U.S. federal courts have exclusive jurisdiction.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.
In addition, if ONS-5010 or any future product candidate receives marketing approval, and we or others later identify undesirable side effects, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approval of such product; ● we may be required to recall a product or change the way such product is administered to patients; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or a contraindication, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ● we may be required to implement a REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; ● additional restrictions may be imposed on the marketing or promotion of the particular product or the manufacturing processes for the product or any component thereof; ● we could be sued and held liable for harm caused to patients; 35 Table of Contents ● such product could become less competitive; and ● our reputation may suffer.
In addition, if ONS-5010 or any future product candidate receives marketing approval, and we or others later identify undesirable side effects, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw approval of such product; ● we may be required to recall a product or change the way such product is administered to patients; ● regulatory authorities may require additional warnings on the label, such as a “black box” warning or a contraindication, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ● we may be required to implement a REMS, or create a medication guide outlining the risks of such side effects for distribution to patients; ● additional restrictions may be imposed on the marketing or promotion of the particular product or the manufacturing processes for the product or any component thereof; ● we could be sued and held liable for harm caused to patients; ● such product could become less competitive; and ● our reputation may suffer. 38 Table of Contents Any of these events could prevent us from achieving or maintaining market acceptance of ONS-5010 or any future product candidate, if approved, and could significantly harm our business, results of operations and prospects.
We may not identify all relevant patents, or incorrectly determine their expiration dates, which may negatively impact our ability to develop and market our products.
We may not identify all relevant patents, or incorrectly determine their expiration dates, which may negatively impact our ability to develop and market our products. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop, market and commercialize our products.
The FDA could delay, limit or deny approval of a product candidate for many reasons, or request additional information similar to their requests in May 2022, including because they: ● may not deem our product candidate to be adequately safe and effective; ● may not agree that the data collected from clinical trials are acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval, and may impose requirements for additional preclinical studies or clinical trials; 31 Table of Contents ● may determine that adverse events experienced by participants in our clinical trials represents an unacceptable level of risk; ● may determine that population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; ● may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; ● may disagree regarding the formulation, labeling and/or the specifications; ● may not approve the manufacturing processes or facilities associated with our product candidate; ● may change approval policies or adopt new regulations; or ● may not accept a submission due to, among other reasons, the content or formatting of the submission.
In addition, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may further delay, limit or prevent marketing approval. 33 Table of Contents The FDA could delay, limit or deny approval of a product candidate for many reasons, or request additional information, including because they: ● may not deem our product candidate to be adequately safe and effective; ● may not agree that the data collected from clinical trials are acceptable or sufficient to support the submission of a BLA or other submission or to obtain regulatory approval, and may impose requirements for additional preclinical studies or clinical trials; ● may determine that adverse events experienced by participants in our clinical trials represents an unacceptable level of risk; ● may determine that population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; ● may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; ● may disagree regarding the formulation, labeling and/or the specifications; ● may not approve the manufacturing processes or facilities associated with our product candidate; ● may change approval policies or adopt new regulations; or ● may not accept a submission due to, among other reasons, the content or formatting of the submission.
We and our CROs and other vendors are required to comply 41 Table of Contents with cGMP, GCP, and GLP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the EEA and comparable foreign regulatory authorities for all of our product candidates in clinical development.
We and our CROs and other vendors are required to comply with cGMP, GCP, and GLP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities for all of our product candidates in clinical development.
We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business, financial condition and results of operations. 24 Table of Contents Raising additional capital may cause dilution to our securityholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
We may also be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could harm our business, financial condition and results of operations. ​ Raising additional capital, including modifications to our existing convertible securities, may cause dilution to our securityholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Under an amended and restated investor rights agreement, with GMS 65 Table of Contents Ventures, GMS Ventures also currently has the power to designate members of our board of directors proportionate to the aggregate holdings of GMS Ventures and Tenshi (including any of their respective affiliates), and two of our ten board members were designated by GMS Ventures.
Under an amended and restated investor rights agreement with GMS Ventures, GMS Ventures also currently has the power to designate members of our board of directors proportionate to the aggregate holdings of GMS Ventures (including any of its affiliates), and two of our ten board members were designated by GMS Ventures.
We are also a non-accelerated filer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
We are also a non-accelerated filer under the Exchange Act, and we are not required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
Moreover, any disputes with our collaboration partners concerning the adequacy of their commercialization efforts will substantially divert the attention of our senior management from other business activities and will require us to incur substantial legal costs to fund litigation or arbitration proceedings.
Moreover, any disputes with the third parties on which we rely concerning the adequacy of their commercialization efforts will substantially divert the attention of our senior management from other business activities and will require us to incur substantial legal costs to fund litigation or arbitration proceedings.
Pursuant to the 2015 Equity Incentive Plan, or the 2015 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. Under the 2015 Plan, the number of shares of our common stock reserved for future issuance as of September 30, 2022 was 13,546,604 shares.
Pursuant to the 2015 Equity Incentive Plan, or the 2015 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. Under the 2015 Plan, the number of shares of our common stock reserved for future issuance as of September 30, 2023 was 17,414,910 shares.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a securityholder. 25 Table of Contents In December 2022, we issued the December 2022 Note to the Lender.
The EMA is responsible for the regulation and recommendation for approval of human medicines in the E.U. This procedure results in a single marketing authorization that is valid in all E.U. countries, as well as in Iceland, Liechtenstein and Norway. The time required to obtain approval abroad may differ from that required to obtain FDA approval.
This procedure results in a single marketing authorization that is valid in all E.U. countries, as well as in Iceland, Liechtenstein and Norway. The time required to obtain approval abroad may differ from that required to obtain FDA approval.
We will require substantial additional capital to commercialize ONS-5010. Although we continue to pursue discussions with potential strategic partners for ONS-5010, there is no guarantee that we will be successful in reaching any such agreement, nor that such agreement, if successful, will cover the anticipated commercialization costs for ONS-5010.
We will require substantial additional capital to continue to operate as a going concern. Although we continue to pursue discussions with additional potential strategic partners for ONS-5010 outside of the United States, there is no guarantee that we will be successful in reaching any such agreement, nor that such agreement, if successful, will cover the anticipated commercialization costs for ONS-5010.
The FDA may require us to conduct additional studies for a product candidate before it allows us to initiate clinical trials under any IND, which could lead to additional delays and increase the costs of our development programs.
The FDA may require us to conduct additional studies for a product candidate before it allows us to initiate clinical trials under any IND, which could lead to additional delays and increase the costs of our development programs. Any such delays in the commencement or completion of our planned or future clinical trials could significantly affect our product development costs.
In the event that any of our license agreements terminate, we may need to find another partner in those markets to commercialize and in certain instances, manufacture any product candidates.
In the event that any of our license agreements or our strategic relationship with Cencora terminates, we may need to find another partner in those markets to commercialize and in certain instances, manufacture any product candidates.
We have never declared or paid any cash dividends on our capital stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to securityholders will therefore be limited to the appreciation of their securities.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash 72 Table of Contents dividends for the foreseeable future. Any return to securityholders will therefore be limited to the appreciation of their securities.
We may also become involved in disputes with others regarding the ownership of intellectual property rights. 46 Table of Contents Third parties may submit applications for patent term extensions in the United States or other jurisdictions where similar extensions are available and/or Supplementary Protection Certificates in the E.U. states (including Switzerland) seeking to extend certain patent protection that, if approved, may interfere with or delay the launch of one or more of our product candidates.
Third parties may submit applications for patent term extensions in the United States or other jurisdictions where similar extensions are available and/or Supplementary Protection Certificates in the E.U. states (including Switzerland) seeking to extend certain patent protection that, if approved, may interfere with or delay the launch of one or more of our product candidates.
We are a pre-commercial biopharmaceutical company and we have incurred net losses in each year since our inception in January 5, 2010, including net losses of $66.1 million and $53.2 million for the years ended September 30, 2022 and 2021, respectively.
We are a clinical stage biopharmaceutical company and we have incurred net losses in each year since our inception in January 5, 2010, including net losses of $59.0 million and $66.1 million for the years ended September 30, 2023 and 2022, respectively.
We cannot guarantee that any of our patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete and thorough, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.
We cannot guarantee that any of our patent searches or analyses, including but not limited to the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete and thorough, nor can we be certain that we have identified each and every patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction. 50 Table of Contents The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.
We initially intend to seek approval for ONS-5010 for the treatment of wet AMD. Any of the regulatory authorities may approve a product candidate for fewer indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials.
Any of the regulatory authorities may approve a product candidate for fewer indications than we request or may grant approval contingent on the performance of costly post-marketing clinical trials.
If our clinical candidates are discontinued or their clinical development is delayed, if the launch of new indications for our marketed products or new product candidates is delayed (for example in May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA and subsequently re-submitted our BLA on August 30, 2022) or does not occur, or if such products are launched and the launch is unsuccessful or the product is subsequently recalled or marketing approval is rescinded, we may have to absorb one hundred percent of related overhead costs and inefficiencies, as well as similar costs of third-party contract manufacturers performing services for us.
If our clinical candidates are discontinued or their clinical development is further delayed, if the launch of new indications for our marketed products or new product candidates is delayed or does not occur, or if such products are launched and the launch is unsuccessful or the product is subsequently recalled or marketing approval is rescinded, we may have to absorb one hundred percent of related overhead costs and inefficiencies, as well as similar costs of third-party contract manufacturers performing services for us.
If, notwithstanding our efforts to comply with new laws, regulations and standards, we fail to comply, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. 67 Table of Contents Further, failure to comply with these laws, regulations and standards might also make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
Further, failure to comply with these laws, regulations and standards might also make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may become involved in litigation relating to claims arising from the ordinary course of business. Our management believes that there are currently no claims or actions pending against us, the ultimate disposition of which would have a material adverse effect on our results of operations, financial condition or cash flows.
Biggest changeOur management believes that there are currently no additional claims or actions pending against us, the ultimate disposition of which would have a material adverse effect on our results of operations, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. ​ 75 Table of Contents PART II
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On July 20, 2020, Liomont filed a complaint against us in the U.S. District Court of the Southern District of New York alleging certain breach of contract claims under our June 25, 2014 strategic development, license and supply agreement relating to the biosimilar development program for ONS-3010 and ONS-1045 claiming $3,000,000 in damages.
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Item 3. Legal Proceedings On November 3, 2023, a securities class action lawsuit was filed against us and certain of our officers in the United States District Court for the District of New Jersey.
Removed
On March 30, 2021, we entered into a confidential settlement agreement with Liomont and the complaint was dismissed on April 11, 70 Table of Contents 2021. We agreed to make an initial settlement payment of $625,000 that was paid in April 2021; and an additional payment of $750,000, which was paid in April 2022.
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The class action complaint alleges violations of the Exchange Act in connection with allegedly false and misleading statements made by us related to our BLA during the period from December 29, 2022 through August 29, 2023.
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There are no remaining future financial obligations. Item 4. Mine Safety Disclosures Not applicable. ​ 71 Table of Contents PART II
Added
The complaint alleges, among other things, that we violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 by failing to disclose that there was an alleged lack of evidence supporting ONS-5010 as a treatment for wet AMD and that we and/or our manufacturing partner had deficient CMC controls for ONS-5010, which remained unresolved at the time our BLA was re-submitted to the FDA and, as a result, the FDA was unlikely to approve our BLA, and that our stock price dropped when such information was disclosed.
Added
The plaintiffs in the class action complaint seek damages and interest, and an award of reasonable costs, including attorneys’ fees. The pending lawsuit and any other related lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of the pending lawsuit and any other related lawsuits is necessarily uncertain.
Added
We could be forced to expend significant resources in the defense of the pending lawsuit and any additional lawsuits, and we may not prevail. In addition, we may incur substantial legal fees and costs in connection with such lawsuits.
Added
We currently are not able to estimate the possible cost to us from these matters, as the pending lawsuit is currently at an early stage, and we cannot be certain how long it may take to resolve the pending lawsuit or the possible amount of any damages that we may be required to pay.
Added
Such amounts could be material to our financial statements if we do not prevail in the defense of the pending lawsuit and any other related lawsuits, or even if we do prevail. We have not established any reserve for any potential liability relating to the pending lawsuit and any other related 74 Table of Contents lawsuits.
Added
It is possible that we could, in the future, incur judgments or enter into settlements of claims for monetary damages. From time to time, we may also become involved in litigation relating to claims arising from the ordinary course of business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. Mine Safety Disclosures 71 ​ ​ ​ PART II ​ 72 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 72 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 73 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 87 ITEM 8.
Biggest changeITEM 4. Mine Safety Disclosures 75 ​ ​ ​ PART II ​ 76 ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 76 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 77 ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk 90 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our units, which comprised one share of our common stock, one-half of a Series A warrant and one-half of a Series B warrant began trading under the symbol “ONSIU” on The Nasdaq Global Market on May 13, 2016 in connection with our initial public offering.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “OTLK”. Common Stockholders As of December 14, 2023, there were approximately 80 stockholders of record of our common stock.
Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during fiscal year ended September 30, 2022. ​ 72 Table of Contents
Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during fiscal year ended September 30, 2023. ​ 76 Table of Contents
Removed
Following separation of the units, on June 13, 2016, our shares of common stock and the Series A warrants and Series B warrants began trading under the symbols “ONS,” “ONSIW” and “ONSIZ,” respectively, and our units were delisted. On February 13, 2018, the listing of our common stock and the Series A Warrants was transferred to The Nasdaq Capital Market.
Removed
On February 18, 2018, the Series B warrants expired and were delisted on May 16, 2018. Following our name change to “Outlook Therapeutics, Inc.,” effective December 4, 2018, our common stock and the Series A warrants began trading under the symbols “OTLK” and “OTLKW,” respectively. Prior to our initial public offering, there was no public market for our securities.
Removed
On February 16, 2022, the Series A warrants expired and were delisted effective February 16, 2022. On November 30, 2022, the closing sale price of our common stock was $1.04. Common Stockholders As of November 30, 2022, there were approximately 96 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

86 edited+42 added−39 removed61 unchanged
Biggest changeOur future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing discussed above, (ii) our ability to complete revenue-generating partnerships with pharmaceutical companies, (iii) the success of our research and development, (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies, and, ultimately, (v) regulatory approval and market acceptance of our proposed future products.
Biggest changeOur future operations are highly dependent on a combination of factors, including (i) the timely and successful completion of additional financing discussed above, (ii) our ability to complete revenue-generating partnerships with pharmaceutical companies, (iii) the success of our research and development, (iv) the development of competitive therapies by other biotechnology and pharmaceutical companies, and, ultimately, (v) regulatory approval and market acceptance of our proposed future products. 86 Table of Contents Cash Flows The following table summarizes our cash flows for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ 2023 2022 Net cash used in operating activities ​ $ (42,973,398) ​ $ (56,674,559) Net cash provided by financing activities ​ ​ 48,968,568 ​ ​ 59,594,047 Net increase in cash and cash equivalents ​ $ 5,995,170 ​ $ 2,919,488 ​ Operating Activities During the year ended September 30, 2023, we used $43.0 million of cash in operating activities resulting primarily from our net loss of $59.0 million.
On November 16, 2021, we entered into an amendment to the 2020 Note, which, among other things, (i) extended the maturity date to January 1, 2023, (ii) increased the interest rate from 7.5% per annum to 10% per annum beginning on January 1, 2022, and (iii) provided for the lender’s right to redeem some or all of the outstanding balance of the 2020 Note for shares of our common stock beginning July 1, 2022, subject to certain limitations.
On November 16, 2021, we entered into an amendment to the November 2020 Note, which, among other things, (i) extended the maturity date to January 1, 2023, (ii) increased the interest rate from 7.5% per annum to 10% per annum beginning on January 1, 2022, and (iii) provided for the lender’s right to redeem some or all of the outstanding balance of the 2020 Note for shares of our common stock beginning July 1, 2022, subject to certain limitations.
In November 2021, we issued in an underwritten public offering an aggregate of 46,000,000 shares of common stock at a purchase price per share of $1.25 for $54.0 million in net proceeds after payment of underwriter discounts and commissions and other offering costs.
In November 2021, we issued in an underwritten public offering an aggregate of 46,000,000 shares of common stock at a purchase price per share of $1.25 for $54.0 million in net proceeds after payment of underwriter discounts and commissions and other underwriter offering costs.
In addition, the Company has the right to convert all or any portion of the outstanding balance under the Note into shares of common stock at the Conversion Price if certain conditions have been met at the time of conversion, including if at any time after the six-month anniversary of the closing date, the daily volume-weighted average price of the common stock on Nasdaq equals or exceeds $2.50 per share (subject to adjustments for stock splits and stock combinations) for a period of 30 consecutive trading days.
In addition, the Company has the right to convert all or any portion of the outstanding balance under the December 2022 Note into shares of common stock at the Conversion Price if certain conditions have been met at the time of conversion, including if at any time after the six-month anniversary of the closing date, the daily volume-weighted average price of the common stock on Nasdaq equals or exceeds $2.50 per share (subject to adjustments for stock splits and stock combinations) for a period of 30 consecutive trading days.
Upon the occurrence of certain events described in the Note, including, among others, the Company’s failure to pay amounts due and payable under the Note, events of insolvency or bankruptcy, failure to observe covenants contained in the Securities Purchase Agreement and the Note, breaches of representations and warranties in the Securities Purchase Agreement, and the occurrence of certain transactions without the Lender’s consent, each such event, a Trigger Event, the Lender shall have the right, subject to certain exceptions, to increase the balance of the Note by 10% for a Major Trigger Event (as defined in the Note) and 5% for a Minor Trigger Event (as defined in the Note).
Upon the occurrence of certain events described in the December 2022 Note, including, among others, the Company’s failure to pay amounts due and payable under the December 2022 Note, events of insolvency or bankruptcy, failure to observe covenants contained in the Securities Purchase Agreement and the December 2022 Note, breaches of representations and warranties in the Securities Purchase Agreement, and the occurrence of certain transactions without the Lender’s consent (each such event, a Trigger Event), the Lender shall have the right, subject to certain exceptions, to increase the balance of the December 2022 Note by 10% for a Major Trigger Event (as defined in the December 2022 Note) and 5% for a Minor Trigger Event (as defined in the December 2022 Note).
Under the Note, “Conversion Price” means, prior to a Major Trigger Event, $2.00 per share (subject to adjustment for stock splits and stock combinations), and following a Major Trigger Event, the lesser of (i) $2.00 per share (subject to adjustment for stock splits and stock combinations), and (ii) 90% multiplied by the lowest closing bid price of the Company’s common stock in the three trading days prior to the date on which the conversion notice is delivered.
Under the December 2022 Note, “Conversion Price” means, prior to a Major Trigger Event, $2.00 per share (subject to adjustment for stock splits and stock combinations), and following a Major Trigger Event, the lesser of (i) $2.00 per share (subject to adjustment for stock splits and stock combinations), and (ii) 90% multiplied by the lowest closing bid price of the Company’s common stock in the three trading days prior to the date on which the conversion notice is delivered.
The principal amount and conversion price of the Note are subject to adjustment upon certain triggering events. See “Description of Indebtedness” below for additional detail. We evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern.
The principal amount and conversion price of the December 2022 Note are subject to adjustment upon certain triggering events. See “Description of Indebtedness” below for additional detail. We evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern.
On August 16, 2022, President Biden signed the Inflation Reduction Act, or the IRA. The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as an exercise tax on stock repurchases, both provisions are effective for tax years beginning after December 31, 2022.
On August 16, 2022, President Biden signed the Inflation Reduction Act, or the IRA. The IRA contains a number of tax related provisions including a 15% minimum corporate income tax on certain large corporations as well as an excise tax on stock repurchases, both provisions are effective for tax years beginning after December 31, 2022.
Financing Activities During the year ended September 30, 2022, net cash provided by financing activities was $59.6 million, primarily attributable to $54.0 million in net proceeds from an underwritten public offering in November 2021 of an aggregate of 46,000,000 shares of our common stock and accompanying 2,100,000 warrants to purchase shares of our common stock, $0.2 million in net proceeds from exercise of common stock warrants, $8.3 million in net proceeds from the sale of common stock under the ATM Offering and $9.4 million in net proceeds from the issuance of an unsecured promissory note with a face amount of $10.2 million in November 2021.
During the year ended September 30, 2022, net cash provided by financing activities was $59.6 million, primarily attributable to $54.0 million in net proceeds from an underwritten public offering in November 2021 of an aggregate of 46,000,000 shares of our common stock and accompanying 2,100,000 warrants to purchase shares of our common stock, $0.2 million in net proceeds from exercise of common stock warrants, $8.3 million in net proceeds from the sale of common stock under our Wainwright ATM Offering and $9.4 million in net proceeds from the issuance of the November 2021 Note with a face amount of $10.2 million in November 2021.
To date, we have not made any material adjustments to our prior estimates of prepaid and accrued research and development expenses. 86 Table of Contents Recently Issued Accounting Pronouncements There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our consolidated financial position, results of operations or cash flows.
To date, we have not made any material adjustments to our prior estimates of prepaid and accrued research and development expenses. Recently Issued Accounting Pronouncements There have been no other accounting pronouncements issued but not yet adopted by us which are expected to have a material impact on our consolidated financial position, results of operations or cash flows.
Howells & Co., as placement agent for certain accredited investors in the offering, warrants to purchase up to an aggregate of 515,755 shares of common stock, which will be exercisable commencing on the one-year anniversary of the closing of the offering at an exercise price of $1.05 per share, which warrants have a three-year term.
Howells & Co., as placement agent for certain accredited investors in 85 Table of Contents the offering, warrants to purchase up to an aggregate of 515,755 shares of common stock, which will be exercisable commencing on the one-year anniversary of the closing of the offering at an exercise price of $1.05 per share, which warrants have a three-year term.
Following an Event of Default, the Lender may accelerate the Note such that all amounts thereunder become immediately due and payable, and interest shall accrue at a rate of 22% annually until paid.
Following an Event of Default, the Lender may accelerate the December 2022 Note such that all amounts thereunder become immediately due and payable, and interest shall accrue at a rate of 22% annually until paid.
Additionally, in October 2022 we submitted a Marketing Authorization Application, or MAA, for ONS-5010 with the European Medicines Agency, or the EMA. On December 22, 2022 our MAA was validated for review by the EMA.
Separately, in October 2022 we submitted a Marketing Authorization Application, or MAA, for ONS-5010 with the European Medicines Agency, or the EMA. On December 22, 2022, our MAA was validated for review by the EMA.
The study design for our clinical program to evaluate ONS-5010 as an ophthalmic formulation of bevacizumab was reviewed at an end of Phase 2 meeting with the FDA in April 2018, and we filed our investigational new drug application, or IND, with the FDA in the first quarter of calendar 2019.
The study design for our clinical program to evaluate ONS-5010 as an ophthalmic formulation of bevacizumab was reviewed at an end of Phase 2 meeting with the FDA in April 2018, and we filed our 77 Table of Contents investigational new drug application, or IND, with the FDA in the first quarter of calendar 2019.
These expenses include: ● expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials; ● expenses incurred by us directly, as well as under agreements with contract manufacturing organizations, or CMOs, for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches; ● outsourced professional scientific development services; ● employee-related expenses, which include salaries, benefits and stock-based compensation; ● payments made under a third-party assignment agreement, under which we acquired intellectual property; ● expenses relating to regulatory activities, including filing fees paid to regulatory agencies; ● laboratory materials and supplies used to support our research activities; and ● allocated expenses, utilities and other facility-related costs.
These expenses include: ● expenses incurred under agreements with contract research organizations, or CROs, as well as investigative sites and consultants that conduct our preclinical studies and clinical trials; ● expenses incurred by us directly, as well as under agreements with contract manufacturing organizations, or CMOs, for manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial materials and commercial materials, including manufacturing validation batches; ● outsourced professional scientific development services; ● employee-related expenses, which include salaries, benefits and stock-based compensation; ● payments made under a third-party assignment agreement, under which we acquired intellectual property; ● expenses relating to regulatory activities, including filing fees paid to regulatory agencies; ● laboratory materials and supplies used to support our research activities; and ● allocated expenses, utilities and other facility-related costs. ​ The successful development of our product candidates is highly uncertain.
GMS Ventures purchased an aggregate of 16,000,000 shares of common stock in the public offering at the public offering price. In connection with the underwritten public offering, we issued the underwriter warrants to purchase up to an aggregate of 2,100,000 shares of common stock at an exercise price of $1.5625 per share, which warrants have a five-year term.
GMS Ventures, our largest stockholder, purchased an aggregate of 16,000,000 shares of common stock in the public offering. In connection with the underwritten public offering, we issued the underwriter warrants to purchase up to an aggregate of 2,100,000 shares of common stock at an exercise price of $1.5625 per share, which warrants have a five-year term.
In December 2022, in a registered direct equity offering to certain institutional and accredited investors, including GMS Ventures, our largest stockholder, we issued 28,460,831 shares of common stock at a purchase price per share of $0.8784 for $24.0 million in net proceeds after payment of placement agent fees and other estimated offering costs.
In December 2022, in a registered direct equity offering to certain institutional and accredited investors, including GMS Ventures, our largest stockholder, we issued 28,460,831 shares of common stock at a purchase price per share of $0.8784 for $23.2 million in net proceeds after payment of placement agent fees and other offering costs.
We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010 or any other product candidate we may develop. We will 82 Table of Contents need substantial additional financing to fund our operations and to commercially develop ONS-5010 or any other product candidate we may develop.
We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010 or any other product candidate we may develop. We will need substantial additional financing to fund our operations and to commercially develop ONS-5010 or any other product candidate we may develop.
We plan to finance our future operations with a combination of proceeds from potential strategic collaborations, sale of the development and commercial rights to our drug product candidates, the issuance of equity securities, the issuance of additional debt, and revenues from potential future product sales, if any.
We plan to finance our future operations with a combination of proceeds from 88 Table of Contents potential strategic collaborations, sale of the development and commercial rights to our drug product candidates, the issuance of equity securities, the issuance of additional debt, and revenues from potential future product sales, if any.
The successful development of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our other product candidates.
At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of the development of, or when, if ever, material net cash inflows may commence from any of our other product candidates.
Results were also positive 73 Table of Contents for the remaining NORSE TWO secondary endpoints with 56.5% (p = 0.0016) of ONS-5010 subjects gaining ≥ 10 letters of vision and 68.5% (p = 0.0116) of ONS-5010 subjects gaining ≥ 5 letters of vision.
Results were also positive for the remaining NORSE TWO secondary endpoints with 56.5% (p = 0.0016) of ONS-5010 subjects gaining ≥ 10 letters of vision and 68.5% (p = 0.0116) of ONS-5010 subjects gaining ≥ 5 letters of vision.
This use of cash was partially offset by $11.1 million of non-cash items such as stock-based compensation, non-cash interest expense, change in fair value of warrant liability, change in fair value of unsecured convertible promissory note, loss on extinguishment of debt, loss on equity method investment and depreciation and amortization expense.
This use of cash was partially offset by $11.1 million of non-cash items such as stock-based compensation, non-cash interest expense, change in fair value of warrant liability, change in fair value of promissory notes, loss on extinguishment of debt, loss on equity method investment and depreciation and amortization expense.
During the year ended September 30, 2022, we sold 4,808,269 shares of common stock under our ATM Offering for $8.6 million in gross proceeds, and paid fees to the sales agent of $0.3 million.
During the year ended September 30, 2022, we sold 4,808,269 shares of common stock under our Wainwright ATM Offering for $8.3 million in gross proceeds, after we paid fees to the sales agent of $0.3 million.
A change in the outcome of any of these variables with respect to the development of a product candidate 77 Table of Contents could mean a significant change in the costs and timing associated with the development of that product candidate.
A change in the outcome of any of these variables with respect to the development of a product candidate could mean a significant change in the costs and timing associated with the development of that product candidate.
This uncertainty is due to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including: ● the number of clinical sites included in the trials; ● the length of time required to enroll suitable patients; ● the number of patients that ultimately participate in the trials; ● the number of doses patients receive; ● the duration of patient follow-up; ● the results of our clinical trials; ● the establishment of commercial manufacturing capabilities; ● the receipt of marketing approvals; and ● the commercialization of product candidates.
This uncertainty is due 80 Table of Contents to the numerous risks and uncertainties associated with the duration and cost of clinical trials, which vary significantly over the life of a project as a result of many factors, including: ● the number of clinical sites included in the trials; ● the length of time required to enroll suitable patients; ● the number of patients that ultimately participate in the trials; ● the number of doses patients receive; ● the duration of patient follow-up; ● the results of our clinical trials; ● the establishment of commercial manufacturing capabilities; ● the receipt of marketing approvals; and ● the commercialization of product candidates. ​ Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals.
Since inception, we have incurred net losses and negative cash flows from our operations. Through September 30, 2022, we have funded substantially all of our operations with $410.6 million in net proceeds from the sale and issuance of our equity securities, debt securities and borrowings under debt facilities.
Since inception, we have incurred net losses and negative cash flows from our operations. Through September 30, 2023, we have funded substantially all of our operations with $470.6 million in net proceeds from the sale and issuance of our equity securities, debt securities and borrowings under debt 84 Table of Contents facilities.
The Note contains customary covenants, including a restriction on our ability to pledge certain of our assets, subject to certain exceptions, without the Lender’s consent. Beginning on April 1, 2023, the Lender will have the right to convert the Note at an initial conversion price of $2.00 per share.
The December 2022 Note contains customary covenants, including a restriction on our ability to pledge certain of our assets, subject to certain exceptions, without the Lender’s consent. The Lender has have the right to convert the December 2022 Note at an initial conversion price of $2.00 per share.
Our BLA and MAA registration program for ONS-5010 in wet AMD involved three clinical trials, which we refer to as NORSE ONE, NORSE TWO and NORSE THREE.
Our initial BLA submission for ONS-5010 in wet AMD involved three clinical trials, which we refer to as NORSE ONE, NORSE TWO and NORSE THREE.
On December 22, 2022, we entered into a Securities Purchase Agreement and issued an unsecured convertible promissory note with a face amount of $31.8 million, or the Note, to Streeterville Capital, LLC, or the Lender, the current holder of our outstanding unsecured promissory note maturing on January 1, 2023, or November 2021 Note.
On December 22, 2022, we entered into a Securities Purchase Agreement and issued an unsecured convertible promissory note with a face amount of $31.8 million, or the December 2022 Note, to Streeterville Capital, LLC, or the Lender, the holder of our November 2021 Note. The December 2022 Note has an original issue discount of $1.8 million.
On November 5, 2020, we received $10.0 million in net proceeds from the issuance of an unsecured promissory note, or the 2020 Note, with a face amount of $10.2 million. The 2020 Note bore interest at a rate of 7.5% per annum, and was due to mature on January 1, 2022, and included an original issue discount of $0.2 million.
On November 16, 2021, we received $10.0 million in net proceeds from the issuance of the November 2021 Note, with a face amount of $10.2 million. The November 2021 Note bore interest at a rate of 9.5% per annum, was due to mature January 1, 2023 and included an original issue discount of $0.2 million.
The formal review process of the MAA by the EMA’s Committee for Medicinal Products for Human Use, or CHMP, is now set to begin with an estimated decision date expected in early 2024. ONS-5010 is our sole product candidate in active development.
The formal review process of the MAA by the EMA’s Committee for Medicinal Products for Human Use, or CHMP, is now well advanced with an estimated decision date expected in the first half of calendar 2024. ONS-5010 is our sole product candidate in active development.
Our future funding requirements will depend on many factors, including: ● the number and characteristics of the product candidates we pursue; ● the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials; ● the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates; ● the cost of manufacturing our product candidates and any drugs we successfully commercialize; ● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements; ● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and ● the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any. 85 Table of Contents See Item 1A “Risk Factors” for additional risks associated with our substantial capital requirements .
Our future funding requirements will depend on many factors, including: ● the number and characteristics of the product candidates we pursue; ● the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical studies and clinical trials; ● the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates; ● the cost of manufacturing our product candidates and any drugs we successfully commercialize; ● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements; ● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; ● expenses associated with the pending securities class action lawsuit, as well as other potential litigation; and ● the timing, receipt and amount of sales of, or milestone payments related to or royalties on, our current or future product candidates, if any.
These factors raise substantial doubt about our ability to continue as a going concern. We will need to raise substantial additional capital to fund our planned future operations, receive approval for and commercialize ONS-5010, commence and continue clinical trials, or develop other product candidates.
We will need to raise substantial additional capital to fund our planned future operations, receive approval for and commercialize ONS-5010, commence and continue clinical trials, or develop other product candidates.
Subsequent to September 30, 2022, we sold an additional 895,391 shares of common stock under our ATM Offering for $1.1 million in net proceeds and the fees paid to the sales agent were immaterial.
During the year ended September 30, 2023, we sold 895,391 shares of common stock under our Wainwright ATM Offering for $1.1 million in net proceeds, and the fees paid to the sales agent were immaterial.
Loss on Extinguishment of Debt During the year ended September 30, 2022, we recorded a loss on extinguishment of $1.0 million in connection with an unsecured promissory note amendment during the year that was accounted for as an extinguishment of the old promissory note.
During the year ended September 30, 2022, we recorded a loss on extinguishment of $1.0 million in connection with our November 2020 Note (as defined below) amendment during the year that was accounted for as an extinguishment of the November 2020 Note.
While the Note is outstanding, the Lender will have a consent right on any future variable rate transactions or any debt. Lender will also have a 10% participation right in any future debt or equity financings.
Subject to certain exceptions, while the December 2022 Note is outstanding, the Lender will have a consent right on any future variable rate transactions or any debt and a 10% participation right in any future debt or equity financings .
In March 2022, we submitted a BLA with the FDA for ONS-5010 (LYTENAVA (bevacizumab-vikg)), an investigational ophthalmic formulation of bevacizumab, which we have developed to be administered as an intravitreal injection for the treatment of wet AMD and other retinal diseases. In May 2022, we voluntarily withdrew our BLA to provide additional information requested by the FDA.
In March 2022, we submitted a Biologics License Application, or BLA, with the FDA for ONS-5010 (LYTENAVA (bevacizumab-vikg)), an investigational ophthalmic formulation of bevacizumab, which we have developed to be administered as an intravitreal injection for the treatment of wet AMD and other retinal diseases.
Our expenditures are subject to additional uncertainties, including the terms and timing of regulatory approvals. We may never succeed in achieving regulatory approval for any of our biosimilar product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others.
We may never succeed in achieving regulatory approval for any of our biosimilar product candidates. We may obtain unexpected results from our clinical trials. We may elect to discontinue, delay or modify clinical trials of some product candidates or focus on others.
While our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in the notes to our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements. 89 Table of Contents Research and Development Expenses As part of the process of preparing our consolidated financial statements, we are required to estimate our prepaid and accrued research and development expenses.
Our goal is to launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet age-related macular degeneration, or wet AMD, diabetic macular edema, or DME, and branch retinal vein occlusion, or BRVO. Our plans also include potentially securing a strategic partner for the United Kingdom, Europe, Japan and other markets.
Our goal is to launch directly in the United States as the first and only approved ophthalmic bevacizumab for the treatment of wet age-related macular degeneration, or wet AMD, diabetic macular edema, or DME, and branch retinal vein occlusion, or BRVO.
As of September 30, 2022, we had federal foreign tax credit carryforwards of $2.4 million available to reduce future tax liabilities, which begin to expire starting in 2023. As of September 30, 2022, we also had federal and state R&D tax credit carryforwards of $10.4 million and $0.8 million, respectively, that will begin to expire in 2032 and 2033, respectively.
As of September 30, 2023, we also had federal and state R&D tax credit carryforwards of $11.2 million and $0.8 million, respectively, that will begin to expire in 2032 and 2033, respectively.
Change in Fair Value of Warrant Liability We issued warrants to purchase our common stock in conjunction with our old senior secured notes, which are classified as liabilities and recorded at fair value.
Change in Fair Value of Warrant Liability We issued warrants to purchase our common stock in conjunction with convertible senior secured notes issued pursuant to a certain Note and Warrant Purchase Agreement dated December 22, 2017, which are classified as liabilities and recorded at fair value.
Syntone – Private Placement and PRC Joint Venture In May 2020, we entered into a stock purchase agreement with Syntone, pursuant to which we sold and issued in a private placement in June 2020, 16,000,000 shares of our common stock at a purchase price of $1.00 per share, for aggregate gross proceeds of $16.0 million.
We have also licensed rights to our legacy biosimilar product candidates (ONS-3010, ONS-1045 and ONS-1050) in other markets. 79 Table of Contents Syntone – Private Placement and PRC Joint Venture In May 2020, we entered into a stock purchase agreement with Syntone, pursuant to which we sold and issued in a private placement in June 2020, 16,000,000 shares of our common stock at a purchase price of $1.00 per share, for aggregate gross proceeds of $16.0 million.
This use of cash was partially offset by $6.0 million of non-cash items such as stock-based compensation, non-cash interest expense, change in fair value of warrant liability, gain on settlement of lease termination obligation, loss on equity method investment and depreciation and amortization expense.
This use of cash was partially offset by $12.4 million of non-cash items such as stock-based compensation, non-cash interest expense, change in fair value of promissory notes, change in fair value of warrant liability, loss on extinguishment of debt, loss on equity method investment and depreciation and amortization expense.
These factors raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
A portion of the proceeds from the Note were used to repay in full the remaining outstanding principal and accrued interest on the November 2021 Note, which was cancelled upon repayment. The Note bears interest at 9.5% per annum and matures on January 1, 2024.
A portion of the proceeds from the December 2022 Note were used to repay in full the remaining outstanding principal and accrued interest on the November 2021 Note, which was cancelled upon repayment.
Following receipt of further correspondence from the FDA, we confirmed the additional information necessary to re-submit the BLA for ONS-5010 and resubmitted the BLA in August of 2022. In October 2022, we received confirmation from the FDA that our BLA has been accepted for filing with a goal date of August 29, 2023 for a review decision by the FDA.
We re-submitted the BLA to the FDA for ONS-5010 on August 30, 2022, and in October 2022, we received confirmation from the FDA that our BLA had been accepted for filing with a goal date of August 29, 2023 for a review decision by the FDA.
Interest Expense Interest expense consists of cash paid and non-cash interest expense related to our senior secured notes, and unsecured notes with current and former stockholders, equipment loans, lease liabilities and other finance obligations.
Interest Expense, Net Interest expense, net consists of cash paid and non-cash interest expense related to our senior secured notes, equipment loans, lease liabilities and other finance obligations, net of de minimis amount of interest income.
We may not be able 84 Table of Contents to initiate commercialization of ONS-5010 if, among other things, the FDA does not approve our BLA when we expect, or at all, or if we are not able to secure sufficient funding of our expected post-launch commercial costs.
We anticipate we will incur net losses and negative cash flow from operations for the foreseeable future. We may not be able to initiate commercialization of ONS-5010 if, among other things, the FDA does not approve our BLA when we expect, or at all, or if we are not able to secure sufficient funding of our expected post-launch commercial costs.
During the year ended September 30, 2021, we used $54.3 million of cash in operating activities resulting primarily from our net loss of $53.2 million.
During the year ended September 30, 2022, we used $56.7 million of cash in operating activities resulting primarily from our net loss of $66.1 million.
Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
See Item 1A “Risk Factors” for additional risks associated with our substantial capital requirements . Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles, or GAAP.
As permitted under ASC 825, we elected the fair value option to account for our convertible promissory note. We recorded the convertible promissory note at fair value with changes in fair value recorded in the consolidated statements of operations.
Change in Fair Value of Promissory Notes The change in fair value relates to convertible promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our convertible promissory notes.
The net cash outflow of $7.1 million from changes in our operating assets and liabilities was primarily due to an increase in prepaid expenses of $1.7 million for prepayments associated with ONS-5010 development costs, a decrease in accrued expenses of $5.3 million primarily due to the settlement of lease termination obligation and payments to sites for accrued costs, a decrease in accounts payable of $0.2 million and $0.2 million of payments for operating leases.
The net cash inflow of $4.8 million from changes in our operating assets and liabilities was primarily due to a net increase in accounts payable and accrued expenses of $2.4 million and a decrease in prepaid expenses of $2.6 million for timing of payments associated with ONS-5010 development costs, partially offset by an increase in other assets of $0.2 million.
Funding Requirements We plan to focus in the near term on supporting the review of our BLA submission for ONS-5010 with the FDA and to prepare for the potential launch of LYTENAVA TM , if approved, to support the generation of commercial revenues. We anticipate we will incur net losses and negative cash flow from operations for the foreseeable future.
No other terms of the December 2022 Note were amended. Funding Requirements We plan to focus in the near term on supporting the review of our BLA submission for ONS-5010 with the FDA and to prepare for the potential launch of LYTENAVA TM , if approved, to support the generation of commercial revenues.
As permitted under ASC 825, we elected the fair value option to account for our convertible promissory note. We record the convertible promissory note at fair value with changes in fair value recorded in the consolidated statements of operations.
Change in Fair Value of Promissory Notes The change in fair value relates to the convertible promissory notes that we elected to account for at fair value. As permitted under ASC 825, we elected the fair value option to account for our convertible promissory notes.
The agreements reached with the FDA on these SPAs cover the protocols for NORSE FOUR, a registration clinical trial evaluating ONS-5010 to treat BRVO, and NORSE FIVE and NORSE SIX, two registration clinical trials evaluating ONS-5010 to treat DME. We intend to initiate these studies following the anticipated FDA approval of our BLA for wet AMD.
The agreements reached with the FDA on these SPAs cover the protocols for NORSE FOUR, a registration clinical trial evaluating ONS-5010 to treat BRVO, and NORSE FIVE and NORSE SIX, two registration clinical trials evaluating ONS-5010 to treat exudative age related macular degeneration, or DME.
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We will need to raise substantial additional capital in order to complete our planned ONS-5010 development program.
We are currently assessing the costs to conduct the additional study and will need to secure additional funding to complete the study. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.
The principal amount and Conversion Price of the Note are subject to adjustment upon certain triggering events.
The Lender has the right to convert the December 2022 Note at the Conversion Price (as defined below). The principal amount and Conversion Price of the December 2022 Note are subject to adjustment upon 87 Table of Contents certain triggering events.
If approved, we expect to receive 12 years of regulatory exclusivity in the United States and up to 10 years of regulatory exclusivity in the European Union. Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity.
Bevacizumab is a full-length, humanized anti-VEGF (Vascular Endothelial Growth Factor) recombinant monoclonal antibody, or mAb, that inhibits VEGF and associated angiogenic activity.
Income Taxes During the years ended September 30, 2022 and 2021, we had no accruals for foreign withholding taxes in connection with our collaboration and licensing agreements. We did not sell any NOLs or unused research and development tax credits during the years ended September 30, 2022 and 2021.
We did not sell any NOLs or unused research and development tax credits during the years ended September 30, 2023 and 2022.
These agreements generally provide for non-refundable upfront license fees, development and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing. We have also licensed rights to our legacy biosimilar product candidates (ONS-3010, ONS-1045 and ONS-1050) in other markets.
These agreements generally provide for non-refundable upfront license fees, development and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing.
Going Concern Consideration Through September 30, 2022, we have funded substantially all of our operations with $410.6 million in proceeds from the sale and issuance of our equity and debt securities. We have also received $29.0 million pursuant to our collaboration and licensing agreements through such date. Our net loss for the year ended September 30, 2022 was $66.1 million.
We have also received $29.0 million pursuant to our collaboration and licensing agreements through such date. Our net loss for the year ended September 30, 2023 was $59.0 million. We also had a net loss of $66.1 million for the year ended September 30, 2022. We have not generated any revenue from product sales.
On June 30, 2022, we prepaid the 2020 Note in full by paying 105% of the outstanding balance. The total payment was $12,934,484, which included interest of $1,546,038. In February 2021, we closed an underwritten public offering of our common stock for net proceeds of $35.5 million.
On June 30, 2022, we prepaid the 2020 Note in full by paying 105% of the outstanding balance. The total payment was $12.9 million, which included interest of $1.5 million and other fees totaling $1.2 million.
During the year ended September 30, 2021, we recorded a loss of $0.5 million related to the increase in the fair value of our common stock warrant liability as a result of the increase in the price of our common stock during the period. Liquidity and Capital Resources We have not generated any revenue from product sales.
This income was attributed to a decline in the price of our common stock during those periods. In fiscal year 2023, we recorded income of $0.1 million, compared to $0.5 million in fiscal year 2022. Liquidity and Capital Resources We have not generated any revenue from product sales.
The warrants are subject to re-measurement at each balance sheet date and we recognize any change in fair value in our statements of operations as other (income) expense. Change in Fair Value of Unsecured Promissory Note The change in fair value relates to an amended promissory note that we elected to account for at fair value.
The warrants are subject to re-measurement at each balance sheet date and we recognize any change in fair value in our statements of operations as other (income) expense. Income Taxes During the years ended September 30, 2023 and 2022, we had no accruals for foreign withholding taxes in connection with our collaboration and licensing agreements.
If approved, we believe ONS-5010 has potential to mitigate risks associated with off-label use of unapproved bevacizumab. Off-label use of unapproved bevacizumab is currently estimated to account for approximately 50% of all wet AMD injections in the United States .
If approved, we believe ONS-5010 has potential to mitigate risks associated with off-label use of unapproved bevacizumab. In the United States, approximately 66.3% of new patient starts are off-label repackaged bevacizumab (ASRS 2022 Membership Survey Presented at ASRS NY 2022).
As of September 30, 2022, we had federal and state NOL carryforwards of $339.9 million and $175.7 million, respectively, that will begin to expire in 2030 78 Table of Contents and 2039, respectively.
As of September 30, 2023, we had federal and state NOL carryforwards of $371.7 million and $207.5 million, respectively, that will begin to expire in 2030 and 2039, respectively. As of September 30, 2023, we had federal foreign tax credit carryforwards of $1.6 million available to reduce future tax liabilities, which begin to expire starting in 2023.
On December 22, 2022, we entered into the Securities Purchase Agreement and issued the Note to the Lender. The Note has an original issue discount of $1.8 million. The Note bears interest at 9.5% per annum and matures on January 1, 2024.
We also made $12.3 million in debt and finance lease obligation payments. Description of Indebtedness On December 22, 2022, we entered into the Securities Purchase Agreement and issued the December 2022 Note to the Lender. The December 2022 Note has a face value of $31.8 million and an original issue discount of $1.8 million.
General and Administrative Expenses The following table summarizes our general and administrative expenses by type for the years ended September 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ 2022 2021 Professional fees ​ $ 8,637,887 ​ $ 6,038,823 Compensation and related benefits ​ ​ 4,102,783 ​ ​ 1,419,954 Stock-based compensation ​ ​ 5,019,474 ​ ​ 3,933,959 Facilities, fees and other related costs ​ ​ 2,979,753 ​ ​ 1,375,989 Total general and administrative expenses ​ $ 20,739,897 ​ $ 12,768,725 ​ General and administrative expenses for the year ended September 30, 2022 increased by $8.0 million compared to the year ended September 30, 2021.
The decrease was primarily due to BLA submission fees of $6.2 million paid in the prior period that were subsequently waived and refunded by the FDA in the current period, $0.9 million decrease in ONS 5010 development costs in the current period, and a decrease in stock-based compensation expenses of $1.7 million primarily due to vesting of performance-based stock options for some of our executives in the prior period. 83 Table of Contents General and Administrative Expenses The following table summarizes our general and administrative expenses by type for the years ended September 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ 2023 2022 Professional fees ​ $ 14,522,528 ​ $ 8,637,887 Compensation and related benefits ​ ​ 4,366,447 ​ ​ 4,102,783 Stock-based compensation ​ ​ 4,560,421 ​ ​ 5,019,474 Facilities, fees and other related costs ​ ​ 3,224,044 ​ ​ 2,979,753 Total general and administrative expenses ​ $ 26,673,440 ​ $ 20,739,897 ​ General and administrative expenses for the year ended September 30, 2023 increased by $5.9 million compared to the year ended September 30, 2022.
The Note contains customary covenants, including a restriction on our ability to pledge certain of our assets, subject to certain exceptions, without the Lender’s consent. Beginning on April 1, 2023, the Lender will have the right to convert the Note at an initial conversion price of $2.00 per share.
The December 2022 Note bears interest at 9.5% per annum and matures on January 1, 2024. The December 2022 Note contains customary covenants, including a restriction on our ability to pledge certain of our assets, subject to certain exceptions, without the Lender’s consent.
The Note has an original issue discount of $1.8 million. We received gross proceeds of $30.0 million upon the closing on December 28, 2022, after deducting the Lender’s transaction costs in connection with the issuance.
We received net proceeds of $18.1 million upon the closing on December 28, 2022, after deducting the Lender’s transaction costs in connection with the issuance and November 2021 Note repayment. The December 2022 Note bears interest at 9.5% per annum and matures on January 1, 2024.
Interest Expense, Net Interest expense increased by $0.6 million to $1.5 million for the year ended September 30, 2022, as compared to $0.9 million for the year ended September 30, 2021. The increase was primarily related to a new unsecured promissory note issued in November 2021.
The increase was primarily related to a new unsecured convertible promissory note issued in December 2022. The comparable prior period interest expense related to an unsecured promissory note issued in November 2021 which was prepaid and cancelled during the year ended September 30, 2023.
We evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern.
During the year ended September 30, 2023, we sold 3,578,223 shares of common stock pursuant to the BTIG ATM Offering, generating $6.3 million in gross proceeds. The fees paid to BTIG were $0.2 million. We evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern.
Subjects will be treated for three months, and the enrollment of subjects in the arm of the study receiving ONS-5010 in vials has been completed. We have also received agreement from the FDA on three Special Protocol Assessments, or SPAs, for three additional registration clinical trials for our ongoing Phase 3 program for ONS-5010.
The FDA is expected to respond to the SPA in early February 2024. We have received agreement from the FDA on three SPAs for three additional registration clinical trials for our ongoing Phase 3 program for ONS-5010.
Results of Operations Comparison of Years Ended September 30, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ ​ ​ ​ 2022 2021 Change Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 42,330,856 ​ $ 38,958,010 ​ $ 3,372,846 General and administrative ​ ​ 20,739,897 ​ ​ 12,768,725 ​ ​ 7,971,172 Loss from operations ​ ​ (63,070,753) ​ ​ (51,726,735) ​ ​ (11,344,018) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on equity method investment ​ ​ 48,730 ​ ​ 46,340 ​ ​ 2,390 Interest expense, net ​ ​ 1,487,456 ​ ​ 936,127 ​ ​ 551,329 Loss on extinguishment of debt ​ ​ 1,025,402 ​ ​ — ​ ​ 1,025,402 Change in fair value of convertible promissory note ​ ​ 882,903 ​ ​ — ​ ​ 882,903 Change in fair value of warrant liability ​ ​ (465,780) ​ ​ 452,146 ​ ​ (917,926) Loss before income taxes ​ ​ (66,049,464) ​ ​ (53,161,348) ​ ​ (12,888,116) Income tax expense ​ ​ 2,800 ​ ​ 2,000 ​ ​ 800 Net loss ​ $ (66,052,264) ​ $ (53,163,348) ​ $ (12,888,916) ​ 79 Table of Contents Research and Development Expenses The following table summarizes our research and development expenses by functional area for the years ended September 30, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ 2022 2021 ONS-5010 development ​ $ 29,596,954 ​ $ 34,469,098 Compensation and related benefits ​ ​ 2,392,139 ​ ​ 1,560,119 Stock-based compensation ​ ​ 2,691,330 ​ ​ 953,328 Other research and development ​ ​ 7,650,433 ​ ​ 1,975,465 Total research and development expenses ​ $ 42,330,856 ​ $ 38,958,010 ​ Research and development expenses for the year ended September 30, 2022 increased by $3.4 million compared to the year ended September 30, 2021.
There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. 82 Table of Contents Results of Operations Comparison of Years Ended September 30, 2023 and 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ ​ ​ ​ 2023 2022 Change Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ $ 26,452,942 ​ $ 42,330,856 ​ $ (15,877,914) General and administrative ​ ​ 26,673,440 ​ ​ 20,739,897 ​ ​ 5,933,543 Loss from operations ​ ​ (53,126,382) ​ ​ (63,070,753) ​ ​ 9,944,371 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss on equity method investment ​ ​ 10,998 ​ ​ 48,730 ​ ​ (37,732) Interest expense, net ​ ​ 1,559,748 ​ ​ 1,487,456 ​ ​ 72,292 Loss on extinguishment of debt ​ ​ 577,659 ​ ​ 1,025,402 ​ ​ (447,743) Change in fair value of promissory notes ​ ​ 3,756,000 ​ ​ 882,903 ​ ​ 2,873,097 Change in fair value of warrant liability ​ ​ (50,919) ​ ​ (465,780) ​ ​ 414,861 Loss before income taxes ​ ​ (58,979,868) ​ ​ (66,049,464) ​ ​ 7,069,596 Income tax expense ​ ​ 2,800 ​ ​ 2,800 ​ ​ — Net loss ​ $ (58,982,668) ​ $ (66,052,264) ​ $ 7,069,596 ​ Research and Development Expenses The following table summarizes our research and development expenses by functional area for the years ended September 30, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended September 30, ​ 2023 2022 ONS-5010 development ​ $ 28,718,140 ​ $ 29,596,954 Compensation and related benefits ​ ​ 2,126,772 ​ ​ 2,392,139 Stock-based compensation ​ ​ 986,598 ​ ​ 2,691,330 Other research and development ​ ​ (5,378,568) ​ ​ 7,650,433 Total research and development expenses ​ $ 26,452,942 ​ $ 42,330,856 ​ Research and development expenses for the year ended September 30, 2023 decreased by $15.9 million compared to the year ended September 30, 2022.
We also had a net loss of $53.2 million for the year ended September 30, 2021. We have not generated any revenue from product sales. We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010 or any other product candidate we may develop.
We anticipate incurring additional losses until such time, if ever, that we can generate significant sales of ONS-5010 or any other product candidate we may develop. 78 Table of Contents On March 26, 2021, we entered into an At-the-Market Offering Agreement with H.C.
Loss on Extinguishment of Debt We recognized a $1.0 million loss on extinguishment related to an unsecured promissory note amendment during 2022 that was accounted for as an extinguishment of the old promissory note. 80 Table of Contents Change in Fair Value of Unsecured Promissory Note The change in fair value relates to an amended promissory note that we elected to account for at fair value during 2022.
During the year ended September 30, 2022, we recorded a loss on extinguishment of $1.0 million in connection with our November 81 Table of Contents 2020 Note (as defined below) amendment during the year that was accounted for as an extinguishment of the November 2020 Note.
Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Impacts of the COVID-19 Pandemic We continue to monitor the ongoing COVID-19 global pandemic, which has resulted in travel and other restrictions to reduce the spread of the disease.
Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. Collaboration and License Agreements From time to time, we enter into collaboration and license agreements for the research and development, manufacture and/or commercialization of our products and/or product candidates.
During the year ended September 30, 2021, we sold 2,855,190 shares of common stock under our ATM Offering and generated $7.2 million in gross proceeds from the ATM Offering and paid fees to the sales agent of $0.2 million. 81 Table of Contents On November 16, 2021, we received $10.0 million in net proceeds from the issuance of an unsecured promissory note, or the 2021 Note, with a face amount of $10.2 million.
On November 5, 2020, we received $10.0 million in net proceeds from the issuance of an unsecured promissory note, or the November 2020 Note, with a face amount of $10.2 million.
We also made $12.3 million in debt and finance lease obligation payments. 83 Table of Contents During the year ended September 30, 2021, net cash provided by financing activities was $56.2 million, primarily attributable to $39.5 million in net proceeds from the underwritten public offering and concurrent private placement in February 2021 for an aggregate of 42,607,394 shares of our common stock and accompanying 2,116,364 warrants to purchase shares of our common stock, $6.8 million in net proceeds from the sale of common stock under the ATM Offering and $10.0 million in net proceeds from issuance of an unsecured promissory note with face amount of $10.2 million in November 2020.
Financing Activities During the year ended September 30, 2023, net cash provided by financing activities was $49.0 million, primarily attributable to $23.2 million in net proceeds from a registered direct equity offering in December 2022 of an aggregate of 28,460,831 shares of our common stock, $7.2 million in net proceeds from the sale of common stock under our Wainwright ATM Offering and BTIG ATM Offering and $30.0 million in net proceeds from the issuance of the December 2022 Note with a face amount of $31.8 million in December 2022.

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