Sight Sciences Inc

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Risks Related to Our Intellectual Property

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We may become a party to intellectual property litigation or administrative proceedings that could be costly, time-consuming, unsuccessful, and could interfere with our ability to sell and market our products.

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Competitors may infringe our patents, or we may be required to enforce our patents to protect our technology. We may also be required to file suit to protect our trade secrets, or may be involved in litigation defending against claims of infringement of the rights of others. In addition, our patents also may become involved in inventorship, priority or validity disputes. To counter or defend against such claims can be expensive and time-consuming and could divert our attention from other functions and responsibilities. In an infringement proceeding, a court may decide that a patent owned by us is invalid or unenforceable. Furthermore, even if our patents are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages and/or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market. Adverse determinations against us in defending against infringement could subject us to significant liabilities to third parties, require us to seek licenses from third parties and prevent us from manufacturing, selling or using the product, any of which could severely harm our business. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation.

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Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our management and other personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on our common stock price. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Any of the foregoing could have a material adverse effect on our business, financial condition or results of operations.

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On September 16, 2021, we filed suit in the U.S. District Court for the District of Delaware (the “Court”)(C.A. No. 1:21-cv-01317) alleging that Ivantis, Inc. directly or indirectly infringes U.S. Patent Nos. 8,287,482, 9,370,443, 9,486,361, and 10,314,742 previously issued to us by making, using, selling, and offering for sale the Hydrus® Microstent. On August 1, 2022, we filed an amended complaint adding Alcon Inc., Alcon Vision LLC, and Alcon Research, LLC (collectively, “Alcon”) as defendants and alleging that all defendants also directly or indirectly infringe U.S. Patent No. 11,389,328. The defendants filed counterclaims seeking declaratory judgments that the patents-in-suit are invalid or not infringed upon. In September 2022, Ivantis and Alcon filed petitions with the USPTO seeking inter partes review of U.S. Patent Nos. 8,287,482, 9,370,443, 9,486,361, and 10,314,742 (IPR2022-01529, IPR2022-01530, IPR2022-01533, IPR2022-01540), each of which the U.S. Patent Office denied for raising prior art references and invalidity arguments that were cumulative of those previously considered by the Office. On April 26, 2024, at the conclusion of a five-day jury trial, the jury awarded us a positive trial verdict of $34 million, comprised of $5.5 million in lost profits damages and $28.5 million in royalty damages for commercial sales of the Hydrus Microstent for the period between its commercial launch through trial. The patents at issue were U.S. Patent Nos. 8,287,482, 9,370,443, and 11,389,328. The Court will entertain post-trial briefings by both parties, including with respect to potential enhancements to the damages and other remedies, and the Court’s final judgment will be subject to appeal. We have expended significant cash resources on this litigation to date, and we expect that we will incur significant additional costs prosecuting our case through completion of the appellate process. There is no guarantee that the positive verdict that we received at trial, or any other remedies that we may hereafter be awarded, will be upheld. Among other things, it is possible that the jury verdict, and any other cash or non-cash remedies that we may be awarded, may be reversed or reduced by the district court in its final judgment or by the appellate court upon appeal. We are presently unable to predict the outcome of this lawsuit, or to reasonably estimate the potential financial impact of the lawsuit, which exposes us to the intellectual property litigation risk factors described herein.

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In connection with the Hercules Loan Agreement, dated January 22, 2024, with the Lenders, we issued warrants to the Lenders to purchase an aggregate of 135,686 shares of our common stock, equal to 2.0% of the Initial Loan, or $700,000. Each warrant is exercisable for a period of seven years from the date of issuance at an exercise price of $5.159 per share and is tradeable in accordance with the provisions of Rule 144 of the Securities Act. The warrants were issued pursuant to an exemption from the registration requirements under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.